STG Reports Flat Sales And Large Drop In Profits For Q2
Cigar giant Scandinavian Tobacco Group (STG) posted mixed results for the second quarter of this year, with flat sales and a large drop in net profits. The company recently reported net sales of 2.361 billion Danish kroner ($369 million), essentially the same as the 2.366 billion kroner it posted for the first quarter of 2024. Profits for the quarter were 227 million kroner ($35.5 million), down 23.6 percent from the 297 million kroner ($46.4 million) earned in the same period of 2024.
STG is a vast company with 10,000 employees and a massive portfolio of cigar brands, including such handmade cigars as Macanudo, CAO and the non-Cuban versions of La Gloria Cubana, Punch and Hoyo de Monterrey. It also has a retail arm that includes the powerhouse Cigars International, plus it makes machine-made cigars, pipe tobaccos, fine-cut tobaccos (used for rolling cigarettes) and so-called “next generation” products, which include nicotine-delivery pouches. That last category has proven troublesome of late, as STG lost its U.S. distribution of the nicotine pouch brand Zyn in 2024. In an earnings call, president and chief executive officer Niels Frederiksen pointed to the loss of Zyn as one reason negatively impacting second-quarter results.
Handmade cigar sales showed a one percent gain for the quarter. Frederiksen also pointed to retail stores in the U.S. as one element of positivity.
“Despite the challenging market environment driven by tariffs and geopolitical unrest, I am pleased that we have remained focused on delivering on our strategic priorities,” Frederiksen said in a statement. “The biggest uncertainties to the expectations are the market developments, including consumer behavior and pricing for handmade cigars in the U.S. as well as the development of the U.S. dollar, which in particular can impact reported net sales.”
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