STG Posts Reduced Sales And Profits For Second Quarter
Corporate giant Scandinavian Tobacco Group A/S, one of the largest cigarmakers in the world, reported a decrease in net sales for the second quarter of this year. The Danish company reported a 2.3 percent drop in net sales, down to 2.2 billion Danish kroner ($320 million). Profits decreased as well. Earnings before interest, taxes, depreciation and amortization (before special items) were 514 million kroner ($75 million), down 5.5 percent from the first quarter of 2022.
STG pointed to a volatile environment, slower regain of market shares in Europe, delays in new store openings in the United Sates and changes in exchange rates as some of the reasons for the decrease.
“On the back of a volatile environment we had to adjust our guidance even though we are continuing to make good progress on our ambition to grow the size of the company through retail expansion, acquisitions and portfolio diversification,” says STG’s chief executive officer Niels Frederiksen. “In the second quarter, we completed the second acquisition of the year and opened another Cigars International retail superstore. For the remainder of the year, we are focusing on leveraging the current strength of our online business and on building a stronger momentum in our Europe branded business.”
The “second acquisition” he refers to is the purchasing of XQS International AB, a Swedish producer of tobacco-free nicotine pouches. The first was the acquisition of Alec Bradley Cigar Co., a family-owned cigar company that STG bought in February.
STG is the parent of General Cigar Co., makers and distributors of such leading brands as Cigars International stores around the United States.
