Scandinavian Tobacco Group, the parent company of Cigars International and General Cigar, today released its third quarter results, showing a slight drop in sales and a slight increase in profits as cigar sales remain strong and consumers turn around. in traditional cigar stores.
Driven by the continued increase in cigar consumption that began in 2020, STG recorded third-quarter sales of DKK 2.2 billion ($ 339 million), down 2.2% from 2.2 billion ($ 347 million) in the third quarter of 2020. Net profit increased from 356 million crowns ($ 55 million) to 383 million crowns ($ 60 million).
“Demand for handmade cigars remains strong,” Managing Director Nils Frederiksen said on a conference call from Denmark explaining the results. “Demand for our products remains positively impacted by changing consumer behavior… higher demand for tobacco has proven to be more sustainable than originally anticipated. ”
“We are seeing a different dynamic for the online division in North America,” said Marianne Rorslev Bock, CFO of STG, noting a shift in the buying habits of consumers who are leaving online sales channels to return. to traditional retail channels as the pandemic situation improves in the United States. While the number of customers in this segment has decreased by more than 5%, she said that “our number of active customers is still between 10 and 15% higher than before the outbreak of the pandemic”.
STG expects that the strong demand for cigars will continue.
“Existing consumers smoke more, but we’ve also found that new consumers have entered the category faster than normal rates,” Frederiksen said. “People have had more free time, more control over their time. Some former smokers have signed up and new smokers have entered the category… there is increased consumption of new small humidifiers.
The company will open a new Cigars International supermarket in San Antonio, Texas, early next year.