Cigar Sales Expected to Slow in ’98

U.S. cigar stocks fell earlier this week after some cigar makers warned that first-quarter earnings will lag analysts’ predictions. Predictions of slowing sales for premium smokes and increased competition from newcomers prompted the drop in stock prices for Consolidated Cigar, General Cigar Holdings Inc. and Swisher International Group Inc. Sales of premium-priced cigars rose 23% during 1997, but Morgan Stanley Dean Witter Discover & Co. tobacco analyst David Adelman believes 1998 sales growth will be between 10% and 15%. Competition from newcomers--called “Don Nobodies” in the cigar trade--have hurt established companies. At the end of 1997, about 115 million “no-name” cigars sat in warehouses or on store shelves, enough to supply U.S. cigar smokers for four months, Adelman said.