STG Reports Flat Sales and Profit Decline in Q2 2025
Scandinavian Tobacco Group (STG) has released its second-quarter financial results, showing flat sales but a significant drop in profits. The cigar giant reported net sales of 2.361 billion Danish kroner ($369 million), almost identical to last year, while profits fell sharply.
Financial Performance
STG’s net profit for the quarter reached 227 million kroner ($35.5 million). That figure marks a decline of 23.6 percent compared to the 297 million kroner ($46.4 million) reported in the same quarter of 2024. Despite steady revenues, higher costs and market challenges weighed heavily on earnings.
A Vast Cigar Portfolio
STG remains one of the largest players in the cigar industry, employing 10,000 people worldwide. Its handmade cigar brands include Macanudo, CAO, Punch, Hoyo de Monterrey, and the non-Cuban La Gloria Cubana. Alongside cigars, the company operates Cigars International, a leading U.S. retail powerhouse.
Beyond handmade cigars, STG produces machine-made cigars, pipe tobaccos, fine-cut tobaccos for rolling cigarettes, and “next generation” nicotine products. The latter has become a weaker area of late. The company lost its U.S. distribution rights for Zyn pouches in 2024, a setback still affecting performance today.
Handmade Cigars Show Modest Growth
Despite the overall dip in profits, handmade cigar sales offered a sliver of positivity. Sales grew by one percent during the quarter, suggesting resilience in this premium segment. Retail operations in the United States also provided some stability against a challenging backdrop.
CEO Comments
STG president and CEO Niels Frederiksen acknowledged the difficulties during the earnings call. He highlighted tariffs, geopolitical uncertainty, and currency fluctuations as major risks.
“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 stated. He noted that consumer behaviour and U.S. cigar pricing remain unpredictable, with the U.S. dollar’s strength posing additional challenges for reported sales.
