Disappointing quarter for General Cigar Parent STG

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Scandinavian Tobacco Group, the European company known as STG, said the company’s second-quarter organic profits and sales were down, results the company called “disappointing and below our expectations.” STG is the parent company of Macanudo maker General Cigar Co., as well as Cigars International.

While the company won’t release its full second-quarter report until Wednesday, it released the highlights over the weekend. Net sales for the quarter were DKK 2.3 billion ($309 million), which the company says reflects a 1.8% decline in “organic net sales”. Profits performed less well, with EBITA (earnings before interest, tax, depreciation and amortization) falling 16.8% to DKK 544 million ($732,000).

In addition to handmade cigars, STG sells machine-made cigars, snus, and pipe tobacco. The company pointed to supply chain issues and said its 2022 handmade cigar shipments are expected to decline. Unlike many other companies in the handmade cigar business, the company has expressed pessimism for the current market. “Consumers of handmade cigars in the United States have become more cautious due to macroeconomic developments,” STG said in its statement. “Therefore, for 2022, volumes of handmade cigars are now expected to decline.”

The company went on to say that it expects flat revenue, instead of the previously expected increase, for 2022.

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