It sounds to me that they’re moving from a low margin offering (tobacco) to a higher margin one (health services). They’re saying that initially the increased revenue from the higher margin one will completly offset the los revenue from the ditched lower margin one. And in the long term, as tobacco use decreases while the need for health services increases, it’ll be more profitable.
In the absence of the details of whatever market research they have to support the decision, that’s not illogical or unreasonable.
Good analysis. Products come and go but the purpose of the BoD, Executive Mgmt, etc
is to make the largest profit margin that they can for the investors in line with the corporate
goals. That should be the guiding decision.