Cigar Industry

Higher Cigar Sales Boost Q3 Results for Scandinavian Tobacco

Nov 5, 2020 | By David Savona
Higher Cigar Sales Boost Q3 Results for Scandinavian Tobacco

The American cigar market has been a strong one for European cigar giant Scandinavian Tobacco Group A/S (STG). The Denmark company, the parent of General Cigar Co., reported strong third-quarter earnings today, which the company said was a direct result of higher cigar sales, particularly handmade cigars sold in the United States.

Net sales for STG were up 23.4 percent in the third quarter of 2020, rising from 1.8 billion Danish kroner ($287.1 million) in the same period for 2019 to 2.2 billion ($354.1 million). Net profits more than doubled, from 172 million kroner ($27.3 million) to 356 million ($56.5 million).

For the first nine months of 2020, STG’s net sales were up 21.2 percent to 5 billion kroner ($793 million). Last year, the company had revenues of 6.9 billion kroner ($1.1 billion).

“The changes in consumer behavior following the outbreak of the Covid-19 pandemic in the second quarter of 2020 have continued with high tobacco consumption across product categories and markets,” the company wrote in a statement announcing the earnings. “In addition to increasing demand for handmade cigars in the U.S., sales of pipe tobacco and fine-cut tobacco have performed better in several markets.”

The demand for handmade cigars is so high that STG has been concerned about making enough of them, and the company has fewer cigars on hand than normal. “Inventories throughout the supply-chain were reduced in recent months. However, production output has increased and inventory levels are expected to normalize early next year assuming no material disruptions and lock-down throughout the supply-chain,” the company reported.

STG owns such handmade cigar brands as La Gloria Cubana, CAO and Macanudo. In addition, the company also makes such machine-made cigars as Henri Wintermans, pipe tobacco that includes the Captain Black brand, and fine-cut tobacco sold under the name Bugler and others. STG also owns Cigars International, the major online cigar retailer with brick-and-mortar locations in the U.S.

STG is in the process of integrating Royal Agio, which it acquired in January for $235 million. That’s a long-term process, one that STG says won’t be complete until 2022.

General Cigar Co.

More in Cigar Industry

See all
Liana Fuente Resigns From Arturo Fuente Cigar Co.

Liana Fuente Resigns From Arturo Fuente Cigar Co.

After 15 years with one of the largest family-owned cigar operations in the premium segment, Liana …

Aug 16, 2022
Handmade Cigar Imports To The U.S. Remain Positive Through May

Handmade Cigar Imports To The U.S. Remain Positive Through May

Cigar import numbers continue their upward trend this year, improving on 2021, one of the best ever …

Aug 12, 2022
Tabacalera Finalizes Purchase Of Dominican Cigar Factory

Tabacalera Finalizes Purchase Of Dominican Cigar Factory

Tabacalera de Garcia, one of the world’s largest handmade cigar factories, has been completely …

Aug 2, 2022
PCA And BCAA Form New Collaboration

PCA And BCAA Form New Collaboration

Two cigar industry organizations, the Premium Cigar Association and the Boutique Cigar Association of …

Jul 26, 2022
Handmade Cigar Imports Continue To Grow

Handmade Cigar Imports Continue To Grow

Imports of premium, handmade cigars were up 5.3 percent for the first four months of this year when …

Jul 18, 2022
Standout Cigars From The 2022 PCA Trade Show

Standout Cigars From The 2022 PCA Trade Show

The handmade cigar industry gathered in Las Vegas this week at the PCA trade show to exhibit upcoming …

Jul 15, 2022