Scandinavian Tobacco Group (STG) released its Q2 2025 earnings report, delivering a mixed financial picture with clear implications for the premium cigar trade. Delivered on August 27 from Copenhagen, the report reveals trends that resonate across retailers and manufacturers alike:
- Steady top-line driven by acquisitions: Net sales held steady at DKK 2.4 billion, showing resilience helped by STG’s acquisition of Mac Baren. However, currency headwinds—particularly fluctuations in the U.S. dollar—strained organic growth, which dipped by 4%.
- Handmade cigars show signs of recovery: While premium handmade cigars still make up around 36% of revenue, their organic net sales turned positive in Q2, signaling a potential rebound in retail demand.
- Machine-rolled cigars and nicotine pouches rise: STG saw strength in machine-rolled cigars and smoking tobacco (up 11% reported) and a significant double-digit rise in its XQS nicotine pouch brand, suggesting room for cross-category retail opportunities.
- Profitability under pressure, but outlook steady: EBITDA margin before special items dropped to 21.1% from 24.5% the previous year, reflecting inflationary costs and pricing mix changes. Still, STG reaffirmed its full-year guidance—which includes a stable net sales target of DKK 9.1–9.5 billion.
- Strategic updates ahead: The company is finalizing its new five-year strategy through 2030, with details expected in a capital markets event scheduled for November 20.
Why It Matters for the Premium Cigar Industry
For Retailers: When handcrafted cigars begin to regain traction, it’s a signal to revisit merchandising strategies and inventory plans to capitalize on renewed interest. Explore how you can feature machine-rolled offerings and accessories alongside your core lines to tap into broader consumer trends.
For Manufacturers: STG’s performance underscores the importance of pricing, mix, and innovation—especially in maintaining margins and offsetting macroeconomic pressures. It’s also a reminder to watch completion categories such as nicotine pouches for inspiration.
For Licensed Tobacco Advocates: A stable outlook from a major industry player like STG, even amid margin pressure and exchange rate shifts, shows the enduring strength of premium tobacco. It reinforces the value of maintaining steady regulatory and retail support systems across markets.
For the full Q2 report from Scandinavian Tobacco Group, click here.