How Falling Sales and Earnings Will Impact Scandinavian Tobacco Group (CPSE:STG) Investors

• Scandinavian Tobacco Group A/S recently reported its third quarter 2025 earnings, revealing that sales fell to DKK 2,357.3 million and net income declined to DKK 227.3 million compared to the same period in 2024.
• An interesting aspect is the year-over-year drop in both sales and earnings per share, signaling weaker performance in core business areas during the most recent quarter.
• We'll examine how the decline in quarterly sales and net income impacts Scandinavian Tobacco Group's previously outlined investment narrative.

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Scandinavian Tobacco Group Investment Narrative Recap

Scandinavian Tobacco Group's investment case centers on balancing stable cash flows and dividends with exposure to premium tobacco categories and new product innovation. The recent softness in quarterly earnings signals ongoing pressure in core product volumes, but does not appear to significantly alter near-term catalysts such as the cost synergies and margin improvements expected from the ongoing Mac Baren integration. However, the pronounced drop in earnings keeps the spotlight on the persistent risk of margin compression, especially as mix and promotional intensity increase.

Of recent announcements, the change on the board following Mark Draper's resignation is most relevant, as strong governance will play a key role in overseeing cost discipline and the integration of acquisitions like Mac Baren. The experience of new board member Hanne Malling may offer additional insight as the company seeks to navigate a period of heightened earnings pressure and strategic execution risk, which remain top of mind given the latest financial results.

By contrast, investors should be aware of the ongoing risk from margin compression and...

Read the full narrative on Scandinavian Tobacco Group (it's free!)

Scandinavian Tobacco Group's outlook anticipates DKK 9.2 billion in revenue and DKK 950.8 million in earnings by 2028. This forecast is based on a slight annual revenue decline of 0.1% and a DKK 154.2 million increase in earnings from the current level of DKK 796.6 million.

Uncover how Scandinavian Tobacco Group's forecasts yield a DKK90.00 fair value, in line with its current price.

Exploring Other Perspectives

Simply Wall St Community members have set fair value estimates from DKK80.09 up to DKK244.67, reflecting a spectrum of expectations from four individual perspectives. With the group's recent earnings softness underscoring the ongoing risk to margins, you may find several alternative outlooks worth considering.

Explore 4 other fair value estimates on Scandinavian Tobacco Group - why the stock might be worth over 2x more than the current price!

Build Your Own Scandinavian Tobacco Group Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Scandinavian Tobacco Group research is our analysis highlighting 4 key rewards and 2 important warning signs that could impact your investment decision.
• Our free Scandinavian Tobacco Group research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Scandinavian Tobacco Group's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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