Turning Point Brands Inc Stock price
Compare with Peer Group
📊 Peer Group
📈 What is it?
The peer group consists of the companies with the most similar business model. They serve as a benchmark for putting a stock into context.
🧮 How is it selected?
Based on similarity of business model, meaning companies from the same industry with comparable products and a similar customer base. That's the only way to compare apples to apples.
🏛️ Why does it matter?
Whether a stock is cheap or expensive is best judged by comparison. A P/E of 18 or an EV/FCF of 20 can look cheap or expensive depending on the yardstick. The peer group gives you the most accurate one: companies with a similar business model that operate under the same conditions.
🎯 What does it mean for investors?
When a metric sits below the peer average, the stock is valued more cheaply relative to its competitors, and above the average more expensively. A discount to the peer group can be an opportunity, but it can also have a reason (for example lower growth). The comparison is a starting point, not a verdict.
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👉 More detailed insights
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Invest better with AI
StocksGuide Unlimited – full access to AI analyses
👉 More detailed insights
👉 Exclusive perspectives on opportunities & risks
👉 Clear answers to your questions
Invest better with AI
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👉 More detailed insights
👉 Exclusive perspectives on opportunities & risks
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Is Turning Point Brands Inc a Top Scorer Stock based on the Dividend, High-Growth-Investing or Leverman Strategy?
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Key metrics
📘 Market Capitalization
📈 What is it?
Market capitalization shows how much a company is currently worth on the stock market.
🧮 How is it calculated?
🏛️ Why is it important?
It helps classify companies by size (Large, Mid, Small Cap) and indicates their market presence and relative stability.
🧮 Calculation
🎯 What does this mean for investors?
- Large-cap companies tend to be more stable, often pay dividends, but may grow more slowly.
- Smaller firms may offer higher growth potential but come with more volatility.
- Market capitalization is a useful indicator of company size — but not a measure of whether a stock is undervalued or overvalued.
📘 Enterprise Value (EV)
📈 What is it?
Enterprise Value represents the total cost to acquire a company — including its debt and excluding its cash reserves.
🧮 How is it calculated?
(= Market Cap + Net Debt)
🏛️ Why is it important?
EV gives a more complete picture of a company's value than market cap alone and is used in key valuation ratios like EV/FCF or EV/Sales.
🧮 Calculation
🎯 What does this mean for investors?
- Enterprise Value shows the true cost of buying a company, including all financial obligations.
- It is more accurate than just looking at market cap, especially when comparing companies with different levels of debt or cash.
- Professional investors prefer EV-based multiples because they better reflect the company’s full financial footprint.
📘 Net Debt
📈 What is it?
Net Debt shows how much debt remains after subtracting a company’s available cash reserves.
🧮 How is it calculated?
🏛️ Why is it important?
It indicates how dependent a company is on borrowed money and how easily it can service its debt in the short term.
🧮 Calculation
🎯 What does this mean for investors?
- Low or negative net debt signals financial strength and flexibility.
- Companies with strong cash positions are better positioned in crises.
- High net debt increases financial risk — especially in environments with rising interest rates or economic downturns.
📘 Cash
📈 What is it?
Cash represents all liquid assets a company can access immediately — including cash, bank deposits, and short-term investments.
🧮 How is it calculated?
🏛️ Why is it important?
It reflects a company’s financial flexibility and resilience — enabling investments, buybacks, or buffer in downturns.
🧮 Calculation
🎯 What does this mean for investors?
- A strong cash position means greater room for maneuver and crisis resistance.
- Cash-rich companies can invest, pay down debt, or repurchase shares.
- But excess idle cash might indicate a lack of growth opportunities.
📘 Shares Outstanding
📈 What is it?
Shares outstanding represent the total number of a company’s shares currently held by investors — excluding treasury stock.
🧮 How is it calculated?
🏛️ Why is it important?
It’s the basis for key metrics like Earnings Per Share (EPS), Market Capitalization, or the Price/Earnings ratio (P/E).
🧮 Calculation
🎯 What does this mean for investors?
- Fewer shares in circulation typically increase earnings per share — making each share more valuable.
- Share buybacks reduce the number of shares and boost per-share metrics.
- Issuing new shares does the opposite — diluting shareholder value and lowering per-share figures.
📘 Price-to-Earnings Ratio (P/E)
📈 What is it?
The P/E ratio shows how many times a company's earnings per share are reflected in its current share price — in other words, how "expensive" the stock appears relative to its profits.
🧮 How is it calculated?
🏛️ Why is it important?
The P/E ratio is one of the most widely used valuation metrics. It helps investors assess whether a stock appears cheap or expensive compared to its earnings power.
🧮 Calculation
📊 P/E (TTM) = Based on earnings from the last 12 months (Trailing Twelve Months):🎯 What does this mean for investors?
- A low P/E may indicate undervaluation — or signal underlying issues.
- A high P/E may reflect strong growth expectations — or an overvalued stock.
📘 Price-to-Sales Ratio (P/S)
📈 What is it?
The P/S ratio shows how much investors are paying for $1 of the company’s revenue – regardless of profitability.
🧮 How is it calculated?
🏛️ Why is it important?
P/S is especially useful for evaluating growth companies or businesses not yet profitable. It reflects how the market values the company’s sales.
🧮 Calculation
Market Cap = $1.37b | Revenue (TTM) = $507.23m
Market Cap = $1.37b | Estimated Revenue = $569.94m
🎯 What does this mean for investors?
- A low P/S may indicate undervaluation — or low profitability.
- A high P/S can reflect strong growth expectations — or excessive optimism.
- Especially helpful when evaluating companies where profits are low, volatile, or negative.
📘 Enterprise Value to Sales (EV/Sales)
📈 What is it?
EV/Sales shows how much investors are paying for $1 of revenue — considering not just equity, but also debt and cash. It’s the capital structure–adjusted version of the P/S ratio.
🧮 How is it calculated?
🏛️ Why is it important?
It’s ideal for comparing companies with different levels of debt. It reflects a company's true cost relative to its revenue.
🧮 Calculation
Enterprise Value = $1.39b | Revenue (TTM) = $507.23m
Enterprise Value = $1.39b | Forward Revenue = $569.94m
🎯 What does this mean for investors?
- EV/Sales allows for capital structure–neutral company comparisons.
- A lower ratio may indicate undervaluation; a higher one may signal strong growth expectations or overvaluation.
- Especially helpful when evaluating high-growth companies with low or negative earnings.
📘 Enterprise Value to Free Cash Flow (EV/FCF)
📈 What is it?
EV/FCF shows how many years it would take for a company to "pay back" its enterprise value using its free cash flow.
🧮 How is it calculated?
🏛️ Why is it important?
It focuses on real cash generation, ignoring accounting noise — ideal for assessing profitability and value based on liquidity, not earnings.
🧮 Calculation
🎯 What does this mean for investors?
- A low EV/FCF may signal undervaluation and strong cash generation.
- A high EV/FCF might reflect weak recent cash flow or aggressive growth expectations.
- Best suited for stable, mature businesses with predictable free cash flows.
📘 Price-to-Book Ratio (P/B)
📈 What is it?
The P/B ratio compares a company’s market value to its book value — showing how much investors are paying for each dollar of net assets.
🧮 How is it calculated?
🏛️ Why is it important?
P/B is commonly used for asset-heavy industries like banks or industrials. It helps assess whether a stock is trading above or below its net asset value.
🧮 Calculation
🎯 What does this mean for investors?
- A P/B below 1 may signal undervaluation — or weak profitability.
- A P/B above 1 implies the market expects future value creation (e.g., brand, IP, growth).
- Best used for companies with tangible assets and strong balance sheets.
📘 Dividend per Share (DPS)
📈 What is it?
Dividend per Share shows how much cash a company pays out to shareholders for each share they own – usually on an annual or quarterly basis.
🧮 How is it calculated?
🏛️ Why is it important?
DPS is the absolute value of the payout per share – crucial for income-focused investors and dividend strategies.
🧮 Calculation
🎯 What does this mean for investors?
- A stable or growing DPS often signals a strong, shareholder-friendly business.
- DPS alone doesn’t tell you how attractive the payout is – the stock price also matters (→ see Dividend Yield).
- Long-term dividend growth is often a hallmark of high-quality companies – like the dividend aristocrats.
📘 Dividend Yield
📈 What is it?
Dividend yield shows how large a company’s dividend is in relation to its current share price.
🧮 How is it calculated?
🏛️ Why is it important?
It allows investors to compare dividend payouts across stocks, regardless of price or payout size.
🧮 Calculation
🎯 What does this mean for investors?
- A stable yield can reflect reliable distributions.
- Comparing 1Y and 5Y yield shows whether dividend growth keeps pace with stock price appreciation.
- A low yield isn’t always negative – it can signal strong past performance or growth focus.
📘 Dividend Growth
📈 What is it?
Dividend growth shows how much a company has increased its dividend per share over time.
🧮 How is it calculated?
5Y: Compound Annual Growth Rate (CAGR)
🏛️ Why is it important?
Consistently rising dividends are often a sign of financial strength and shareholder orientation – especially relevant for long-term investors.
🧮 Calculation
🎯 What does this mean for investors?
- Stable dividend growth is a sign of sustainable earning power.
- High dividend growth can significantly boost your total return:
- If a company pays $1 in dividends and increases it by 15% annually over 5 years, you’ll receive $2 per share in year 5 – twice as much as at the start!
📘 Payout Ratio
📈 What is it?
The payout ratio shows what percentage of a company’s earnings (per share) is distributed to shareholders as dividends.
🧮 How is it calculated?
🏛️ Why is it important?
It helps assess whether the dividend is sustainable – especially in relation to the company’s profitability.
🧮 Calculation
🎯 What does this mean for investors?
- A low payout ratio means the company retains more earnings for reinvestment – typical for growth companies.
- A moderate payout (e.g. 25–50%) indicates a healthy balance between returns and reinvestment.
- High payout ratios may seem attractive but can carry risk if earnings decline.
📘 Consecutive Dividend Increases
📈 What is it?
This metric shows how many consecutive years a company has raised its dividend per share – without any cuts or pauses.
🧮 How is it calculated?
(Special dividends are not considered.)
🏛️ Why is it important?
A long track record of increases reflects financial strength, consistency, and shareholder commitment.
🎯 What does this mean for investors?
- A long dividend increase streak builds confidence – especially in volatile markets.
- Such companies are seen as reliable and income-friendly investments.
- The longer the streak, the stronger the company’s dividend discipline.
📘 Revenue
📈 What is it?
Revenue shows how much a company earns in total from selling its products and services – the gross income before any costs are deducted.
🧮 How is it calculated?
🏛️ Why is it important?
Revenue is one of the key figures to assess a company’s size, market position, and growth potential.
🧮 Calculation
🎯 What does this mean for investors?
- Growing revenue indicates rising demand and can be an early signal of future earnings growth.
- Comparing actual and expected revenue reveals trends in the market environment and analyst sentiment.
- Note: Strong revenue alone isn’t enough – margins and profitability matter just as much.
📘 EBITDA
📈 What is it?
EBITDA stands for “Earnings Before Interest, Taxes, Depreciation, and Amortization.” It reflects a company’s operating profit before the effects of financing, taxes, and accounting depreciation.
🧮 How is it calculated?
🏛️ Why is it important?
EBITDA is widely used to evaluate a company’s operating performance – especially across capital-intensive sectors or international comparisons.
🧮 Calculation
🎯 What does this mean for investors?
- A high or growing EBITDA indicates strong operational profitability – independent of taxes, interest, or accounting methods.
- It’s especially useful for comparing companies across sectors or geographies.
- Important: EBITDA is not a net income figure – it excludes key costs like depreciation and interest.
📘 EBIT
📈 What is it?
EBIT stands for “Earnings Before Interest and Taxes.” It reflects a company’s operating profit after depreciation, but before interest and tax expenses.
🧮 How is it calculated?
🏛️ Why is it important?
EBIT is a core profitability metric that shows how well the company performs in its main business operations – independent of capital structure and tax environment.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBIT indicates strong profitability from the company’s core business – before financial and tax effects.
- It allows better comparison between companies with different debt levels or tax structures.
- Compared to EBITDA, EBIT already accounts for depreciation and reflects capital intensity more clearly.
📘 Net Income
📈 What is it?
Net income is the company’s total profit – the amount left after all expenses, taxes, interest, and depreciation have been deducted.
🧮 How is it calculated?
🏛️ Why is it important?
Net income is the most comprehensive measure of a company’s profitability – showing how much actual profit remains after all business and financing costs.
🧮 Calculation
🎯 What does this mean for investors?
- Growing net income indicates that the company is managing all of its costs efficiently.
- It directly influences valuation metrics like P/E ratio and the company’s dividend capacity.
- Over time, net income trends reveal how resilient and profitable the business model really is.
📘 Free Cash Flow (FCF)
📈 What is it?
Free Cash Flow shows how much actual cash remains after a company covers its operating expenses and capital expenditures.
🧮 How is it calculated?
🏛️ Why is it important?
FCF reflects a company’s real financial strength – regardless of accounting profits. It shows how much flexibility a company has for dividends, share buybacks, or debt reduction.
🧮 Calculation
🎯 What does this mean for investors?
- High free cash flow means the company generates real, usable cash – independent of reported net income.
- It’s often the most reliable base for sustainable dividends and buybacks.
- Declining FCF can be an early warning sign – even when profits appear stable.
📘 Revenue Growth
📈 What is it?
Revenue growth shows how much a company’s sales have changed compared to the previous year – both on a trailing basis (TTM) and based on forward projections.
🧮 How is it calculated?
Forward = (Expected revenue ÷ Revenue in prior year − 1) × 100
Forward growth is based on analyst estimates for the current fiscal year.
🏛️ Why is it important?
Rising revenue signals growing demand, business expansion, and market share gains – especially important for growth-oriented companies.
🧮 Calculation
🎯 What does this mean for investors?
- Growth is the engine of long-term value creation – especially in tech and growth sectors.
- What matters is not just current growth, but its sustainability.
- Forward projections reflect whether analysts expect continued momentum – or a slowdown.
📘 EBITDA Growth
📈 What is it?
EBITDA growth shows how much a company’s operating profit (before interest, taxes, depreciation, and amortization) has increased or decreased compared to the previous year.
🧮 How is it calculated?
Forward = (Expected EBITDA ÷ EBITDA from prior year − 1) × 100
The forward estimate is based on analyst projections for the current fiscal year.
🏛️ Why is it important?
Growing EBITDA indicates improving operational profitability – regardless of financing or accounting effects.
🧮 Calculation
🎯 What does this mean for investors?
- Strong EBITDA growth signals operational efficiency and scalability – especially during growth phases.
- EBITDA growth can be an early indicator of margin and earnings expansion – but should be assessed alongside revenue and EBIT.
📘 EBIT Growth
📈 What is it?
EBIT growth shows how much a company’s operating profit (after depreciation, but before interest and taxes) has increased compared to the previous year.
🧮 How is it calculated?
Forward = (Expected EBIT ÷ EBIT from prior year − 1) × 100
The forward estimate is based on analyst projections for the current fiscal year.
🏛️ Why is it important?
EBIT growth is a direct indicator of a company’s business performance – taking into account capital intensity through depreciation.
🧮 Calculation
🎯 What does this mean for investors?
- Rising EBIT signals improving operating profitability – even after accounting for depreciation.
- It’s especially important for evaluating companies with significant capital expenditures.
- Combined with revenue and EBITDA growth, EBIT growth provides a well-rounded view of operational progress.
📘 Net Income Growth
📈 What is it?
Net income growth shows how much a company’s bottom-line profit has increased or decreased compared to the previous year – both on a trailing basis (TTM) and based on analyst projections.
🧮 How is it calculated?
Forward = (Expected net income ÷ Net income from prior year − 1) × 100
The forward estimate reflects analysts’ expectations for the current fiscal year.
🏛️ Why is it important?
Net income is the ultimate measure of profitability. Growing net income signals stronger efficiency, cost control, and sustainable earnings power.
🧮 Calculation
🎯 What does this mean for investors?
- Stronger net income boosts valuation, dividend potential, and investor confidence.
- If profits stall while revenue grows, it may signal margin pressure.
📘 Free Cash Flow Growth
📈 What is it?
Free cash flow (FCF) growth shows how a company’s available cash – after covering operating expenses and capital expenditures – has changed compared to the previous year.
🧮 How is it calculated?
🏛️ Why is it important?
Free cash flow reflects real financial strength. Growing FCF indicates more flexibility for dividends, share buybacks, and reinvestment.
🧮 Calculation
🎯 What does this mean for investors?
- Declining FCF may point to rising investments, increasing costs, or weaker operating performance.
- Especially for dividend investors, FCF growth is critical – since dividends are paid from actual available cash.
- A negative trend isn't always bad, but it deserves closer attention.
📘 Gross Margin
📈 What is it?
Gross margin shows how much of a company’s revenue remains after deducting the direct costs of goods sold (like materials and production). It represents the company’s “raw profit” before fixed costs, taxes, and interest.
🧮 How is it calculated?
Or simply: Gross Margin = Gross Profit ÷ Revenue × 100
🏛️ Why is it important?
Gross margin indicates how efficiently a company can produce or procure what it sells. It is a key measure of product-level profitability and pricing power.
🧮 Calculation
🎯 What does this mean for investors?
- A high gross margin suggests strong pricing power and efficient production.
- Falling margins may signal rising input costs or competitive pressure.
- Compared to peers, gross margin offers insights into the quality of a business model.
📘 EBITDA Margin
📈 What is it?
The EBITDA margin shows how much of a company’s revenue remains as operating profit before interest, taxes, depreciation, and amortization.It reflects operating efficiency without being distorted by financing or accounting factors.
🧮 How is it calculated?
🏛️ Why is it important?
The EBITDA margin reveals how much operating income a company generates per dollar of revenue – independent of capital structure and tax effects.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBITDA margin reflects strong core profitability – before accounting distortions.
- It allows for effective comparisons across companies and sectors.
- A stable or growing margin signals efficient cost control and business scalability.
📘 EBIT Margin
📈 What is it?
The EBIT margin shows what percentage of revenue remains as operating profit after depreciation but before interest and taxes.
🧮 How is it calculated?
🏛️ Why is it important?
The EBIT margin reflects a company’s core profitability while accounting for capital intensity (e.g. machinery, infrastructure). It’s especially useful for comparing businesses with different levels of depreciation.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBIT margin shows that the company remains efficient even after factoring in depreciation.
- It’s especially relevant for capital-intensive industries.
- Stable or rising EBIT margins over time are a strong indicator of pricing power and business quality.
📘 Net margin
📈 What is it?
Net margin shows how much of a company’s revenue remains as bottom-line profit after deducting all costs, interest, taxes, and depreciation.
🧮 How is it calculated?
🏛️ Why is it important?
Net margin reflects a company’s overall efficiency – across operations, financing, and taxation. It shows how much actual profit is generated from each dollar of revenue.
🧮 Calculation
🎯 What does this mean for investors?
- A high net margin means the company is not only strong operationally but also manages financing and taxes efficiently.
- Peer comparisons reveal business quality and competitiveness.
- Declining margins despite revenue growth can be a red flag for rising costs or inefficiencies.
📘 Free cash flow margin
📈 What is it?
The free cash flow (FCF) margin shows how much of a company’s revenue remains as actual free cash after covering all operating expenses and capital expenditures.
🧮 How is it calculated?
🏛️ Why is it important?
This margin reflects the true liquidity generated by the business – independent of accounting rules or depreciation. It’s especially relevant for dividends, buybacks, and reinvestment decisions.
🧮 Calculation
🎯 What does this mean for investors?
- A high FCF margin means a company consistently generates strong cash flow.
- It’s a positive signal for financial stability and shareholder returns.
- The long-term trend is key – a declining margin may indicate rising investments or weakening operating efficiency.
📘 Equity Ratio
📈 What is it?
The equity ratio indicates what portion of a company’s total assets is financed by shareholders’ equity – in other words, how much it relies on its own capital.
🧮 How is it calculated?
🏛️ Why is it important?
A high equity ratio reflects financial strength and stability, especially during downturns. It’s a key indicator of a company’s solvency and long-term risk profile.
🧮 Calculation
🎯 What does this mean for investors?
- Companies with high equity ratios are generally more resilient and less dependent on external debt.
- Low equity ratios can signal higher risk or aggressive financial strategies.
- Important: Always assess the equity ratio in combination with the return on equity (ROE). This shows not just how stable the company is – but also how efficiently it uses shareholder capital.
📘 Return on Equity (ROE)
📈 What is it?
Return on equity (ROE) shows how efficiently a company uses its shareholders’ equity to generate profit. In other words: how much net income is earned per dollar of equity.
🧮 How is it calculated?
🏛️ Why is it important?
ROE is a core profitability metric. It helps investors understand whether a company delivers attractive returns on the capital provided by its shareholders.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROE indicates that the company is using its capital efficiently and profitably.
- It’s especially meaningful for capital-intensive businesses or firms with high equity bases.
- Important: A very high ROE can also result from high debt levels – always interpret it alongside the equity ratio to assess financial health.
📘 Return on Capital Employed (ROCE)
📈 What is it?
ROCE measures how efficiently a company generates profits from its total capital – including both equity and interest-bearing debt.
🧮 How is it calculated?
It evaluates the return on all capital employed, regardless of how it’s financed.
🏛️ Why is it important?
ROCE is ideal for comparing companies with different financing structures. It shows how well management uses capital to create value for both shareholders and creditors.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROCE means the company uses its capital efficiently – regardless of whether it's funded by debt or equity.
- The higher the ROCE compared to peers, the more value the company creates with its invested capital.
- Especially relevant for capital-intensive sectors like industrials, energy, or infrastructure.
📘 Return on Invested Capital (ROIC)
📈 What is it?
ROIC measures how efficiently a company generates returns from the capital invested in its core operations – regardless of whether the capital comes from equity or debt.
🧮 How is it calculated?
- NOPAT = Net Operating Profit After Taxes
- Invested Capital = Operating assets minus non-interest-bearing liabilities
🏛️ Why is it important?
ROIC is one of the most accurate indicators of capital efficiency. Unlike return on equity, it is not distorted by leverage and shows how much value is created for all capital providers.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROIC shows how effectively a company uses the capital that is truly invested in its core operations.
- Unlike ROCE, ROIC focuses only on the capital that is actively used to run the business – and that requires a return (i.e. interest-bearing).
- Especially useful when comparing companies with large amounts of excess cash or non-interest-bearing liabilities – giving a more realistic picture of capital efficiency.
📘 Leverage Ratio (Debt-to-Equity)
📈 What is it?
The leverage ratio indicates how much a company relies on interest-bearing debt (such as loans and bonds) relative to its shareholders’ equity.
🧮 How is it calculated?
🏛️ Why is it important?
This ratio helps assess a company’s financial structure and risk profile. High leverage can enhance returns – but also increases exposure to interest rate changes and financial stress.
🧮 Calculation
🎯 What does this mean for investors?
- A low leverage ratio signals financial strength and independence.
- A higher ratio can improve returns in good times but increases risk during downturns or rising interest rate periods.
- 👉 Always interpret in the context of industry, capital intensity, and interest rate environment.
📘 Earnings per share (EPS)
📈 What is it?
Earnings per Share (EPS) shows how much profit is attributable to a single share – and is one of the most important metrics for evaluating a company's performance.
🧮 How is it calculated?
The diluted share count reflects potential new shares that could be issued through options, convertible bonds, or other rights.
🏛️ Why is it important?
EPS is the basis for many key valuation metrics like P/E ratio, PEG ratio, or payout ratio. It enables comparisons of profitability across companies, regardless of their size.
🧮 Calculation
🎯 What does this mean for investors?
- EPS captures per-share profitability and is especially useful for comparisons over time or with analyst estimates.
- Rising EPS may signal consistent growth or share buybacks.
- Important: Always use diluted EPS for more realistic valuations – especially in companies with stock-based compensation.
📘 Free cash flow per share (FCF per share)
📈 What is it?
Free Cash Flow per Share shows how much free cash flow a company generates per outstanding share – after investments, but before dividends or debt repayments.
🧮 How is it calculated?
Free cash flow is calculated as operating cash flow minus capital expenditures (CapEx).
🏛️ Why is it important?
FCF per Share reveals how much real cash is available per share – useful for dividends, buybacks, or reducing debt. Unlike net income, free cash flow is harder to manipulate and often seen as a more reliable metric.
🧮 Calculation
🎯 What does this mean for investors?
- High FCF per share signals strong financial flexibility.
- It shows how much capital the company can effectively reinvest or return to shareholders.
- Particularly relevant for dividend payers and capital-efficient businesses.
📘 Short interest
📈 What is it?
Short interest indicates how many shares of a company are currently sold short – that is, borrowed and sold by investors who expect the price to decline.
🧮 How is it calculated?
It reflects the percentage of a company’s shares that are being shorted relative to the total shares available.
🏛️ Why is it important?
Short interest serves as a sentiment indicator: A high value may signal skepticism or bearish expectations – but also increases the potential for a short squeeze if prices rise unexpectedly.
🧮 Calculation
🎯 What does this mean for investors?
- Low short interest usually indicates market confidence in the company.
- High short interest can be a warning sign – or an opportunity if sentiment shifts.
- Especially relevant in volatile markets or ahead of key earnings releases.
📘 Employees
📈 What is it?
The employee count shows how many people a company employs worldwide – offering insights into its size, structure, and business model.
🧮 How is it calculated?
🏛️ Why is it important?
It helps assess operational scale, labor intensity, and cost structure. Combined with revenue and profit, it enables key metrics like revenue per employee or productivity.
🧮 Calculation
🎯 What does this mean for investors?
- A high headcount can signal operational complexity – but also significant growth capacity.
- Revenue per employee is a key indicator of efficiency.
- Especially useful for comparing tech, industrial, or service-heavy companies.
📘 Turnover per employee
📈 What is it?
Revenue per employee indicates how much revenue a company generates on average per employee – a key measure of efficiency and productivity.
🧮 How is it calculated?
The employee count is typically taken from the most recent annual report.
🏛️ Why is it important?
This metric helps compare business models – especially between labor-intensive and technology-driven companies. A high value suggests automation, operational efficiency, or strong value creation per head.
🧮 Calculation
🎯 What does this mean for investors?
- A high revenue per employee indicates a scalable and margin-strong business model.
- A low figure may reflect labor-intensive operations or lower value-add.
- Especially helpful when comparing tech companies to industrial or service sectors.
Turning Point Brands Inc Stock Analysis
Analyst Opinions
10 Analysts have issued a Turning Point Brands Inc forecast:
Analyst Opinions
10 Analysts have issued a Turning Point Brands Inc forecast:
Turning Point Brands Inc Events
Past Events
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AUG
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Q2 2026 Earnings Call
about 2 months ago
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MAY
7
Q1 2026 Earnings Call
5 months ago
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MAR
2
Q4 2025 Earnings Call
7 months ago
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NOV
5
Q3 2025 Earnings Call
11 months ago
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StocksGuide Free
Turning Point Brands Inc — Q2 2026 Earnings Call
1. Management Discussion
Thank you. Good morning and welcome to the Turning Point Brands' second quarter 2026 earnings conference call. All participants will be in listen-only mode. All lines have been placed on mute to prevent any background noise. If you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Andrew Flynn, Chief Financial Officer.
Please go ahead.
Good morning, everyone. Earlier today, we issued a press release covering our second quarter results, available in our investor relations section of our website at www.turningpointbrands.com. During this call, we'll discuss consolidated and segment operating results, the operating environment, and our progress against our strategic plan. Before we begin, please refer to the forward-looking statements, disclosure, and risk factors in our press release and SCC filings. We'll also reference certain non-GAAP financial measures. Reconciliations and explanations are included in today's earnings release. With that, I'll turn the call over to our CEO, Grant Purdy.
Thanks, Andrew. Good morning, everybody, and thank you for joining our call. we delivered another quarter of strong execution in Modern Oral, with gross and net sales up 149% and 128% year over year, and 26% and 32% sequentially. Growth was driven by our continued focus on expanding retail distribution for both free and ALP and our direct-to-consumer platforms. Our performance versus the market proves that both brands are resonating with adult nicotine consumers. Our investments continue to strengthen our competitive position and drive market share gains. In the quarter, Modern Oral accounted for 48% of our total revenue, up from 26% in Q2 of 2025. We were pleased by Stoker's tobacco results and early customer response to the launch of our new Stoker's Proud MST product earlier this year. We believe Stokers will continue to gain share as the segment's only truly premium product for value-oriented consumers.
Performance across Zigzag was in line with our expectations. We are sharpening our new product pipeline to better reflect evolving consumer preferences and leveraging our growing sales force to expand distribution. These initiatives have helped stabilize our heritage businesses and position them for long-term growth. In the near term, these businesses continue to contribute strong cash flow, which we are investing to accelerate growth in modern oral. Last quarter, we discussed the generational opportunity Marlboro Oil represents as nicotine consumption shifts away from cigarettes. Our priorities for 2026 remain centered on the initiatives we believe will have the greatest impact on building scaled, profitable nicotine pouch businesses. These strategic actions, despite near-term zoning pressure, are critical to capturing meaningful share in this evolving high barrier category.
First is accelerating customer traction. We are seeing positive results across both free and out. Summer will expand on wins, supporting both awareness of our products, and customer acquisition. Second is growing distribution. As previously mentioned, we expect our chain store count to increase 70% year-over-year by the end of 2026 as a result of our strong chain store conversations. Working alongside these retailers, we have established distribution plans for these new placements. As is typical with national chain accounts, shelf resets can have long lead times, meaning our products will be added to stores incrementally over the next several quarters. Notably, shelf resets have begun with numerous new large retail accounts across the country. which we expect to largely fulfill through the balance of the year. Third is building and scaling our infrastructure.
As we've scaled the distribution of our brands, we've continued investing in our sales force to service these new accounts. Our sales organization is critical to executing successfully at retail by ensuring product availability, merchandising execution, shelf placement, and ongoing customer support. We are on pace to increase our sales force by approximately 50% this year, making strong progress towards building the right sales force that can best capture the nicotine pouch growth opportunity and maximize performance at Zigzag and Stokers. After this initial build-out, we'll be able to further scale without comparable increases in SG&A. Subject to regulatory approval, we are on track to launch U.S. manufacturing by the end of the year. which we expect to significantly reduce COGS over time. Once fully scaled, we believe we can achieve gross margins of approximately 70%. Our results continue to reinforce our disciplined capital allocation strategy.
We are directing capital and commercial resources towards the brands and categories with the greatest long-term value creation potential, particularly modern oral. The investments we've made over the past several quarters in free and ELB are already contributing meaningful to our top-line performance and should accelerate earnings growth over time. These foundational investments position us to capture meaningful market share and create sustainable shareholder value as the category continues to develop. With that, I will hand the call over to Summer to walk through the progress of our key go-to-market initiatives.
Thank you, Graham, and good morning, everyone. Our growth strategy has been consistent. Invest for the long term, build durable brands, and scale alongside consumer demand. We are encouraged that our investments are translating into tangible results. Each new retail win expands consumer reach and first-time brand trial, while stronger demand supports additional distribution and greater scale. Together, these advantages will reinforce one another and create a growth platform we believe will compound over time. I'd like to begin with our commercial momentum.
As we highlighted last quarter, our sales organization is now selling both out and free. Holding on the success of ALP's direct-to-consumer performance, we're seeing positive retail response and evidence of pent-up consumer demand for ALP. Additionally, we've taken early steps to grow internationally through a phase expansion into select European markets. as with any new market, will remain disciplined in our approach while continuing to evaluate the opportunity thoughtfully. We believe these efforts further strengthen our long-term growth platform. Moving to brand building initiatives, our partnership with TKO has driven success across several early indicators of brand awareness and consumer engagement. To extend that momentum into retail, we've begun introducing UFC co-branding in stores, helping to bring the partnership directly to consumers at the point of purchase. Across our portfolio, our investments remain intentional and focused on strengthening long-term brand value.
In ZigZag, we're deepening engagement with existing consumers while expanding brand awareness in under-indexed markets. Our recent Life's Fast, Burns Slow campaign reflects our ability to connect with today's consumers while remaining true to the heritage that has defined the brand for generations. These efforts contributed to our strongest 420 weekend in ZigZag's history, demonstrating that thoughtful and strategic brand investment can drive increased engagement. Overall, we're encouraged by the progress we're seeing across both retail expansion and brand building initiatives. While we're still early in our journey, initial results reinforce our confidence that nicotine pouches can become a significant long-term growth driver for Turning Point. we now turn the call over to Andrew to go through our financial results. Thank you, Summer.
Starting with consolidated results, sales were up 23% year-over-year to $143 million for the quarter. Growth was driven primarily by modern oral. In the quarter, we received a tariff refund that had a positive impact on gross profit. As reported, gross profit was 94 million. Adjusting for the out-of-period COGS related to tariff refund, gross profit was 81 million, which is an increase of 22% versus a year ago. The increase in gross profit dollars was driven primarily by modern oral. Adjusted gross profit as a percent of sales was 57%.
Report SG&A was 77 million for the quarter, which was up 21 million sequentially. Our SG&A investments are designed to create long-term brand value. As we grow, leading consumer brands, investments in our commercial team, marketing sponsorships, and in-store merchandising are critical, yet highly flexible. This flexibility gives us confidence to invest where we see momentum and incremental opportunity. As our retail footprint expands and sales continue to grow, we expect our costs to be leveraged over a larger revenue base. Adjusted EBITDA was down 50% year-over-year to $15 million for the quarter at 11% margin The decline was attributed to our strategy to increase sales and marketing investment and softness in ZigZag, partially offset by accelerated growth in Modern Oral. Stoker's segment net sales increased 55% year-over-year to $108 million for the quarter.
The Stoker's segment now accounts for 75% of consolidated net sales. The growth was driven by modern oral nicotine pouch net sales, which increased 128% year over year, achieving net revenue of $68 million. Gross revenue was 87 million, up 149% year-over-year. This performance was driven by both growth in e-commerce and brick and mortar sales. For the quarter, Modern Oral accounted for 48 percent of consolidated net sales, up from 26% a year ago. Heritage Stoker's Brands net revenue decreased 1% year-over-year to $39 million for the quarter, driven by continued share growth in MST that was partially offset by anticipated declines in loose leaf. Stoker's as reported gross profit was 71 million.
On an adjusted basis, Stoker's gross profit increased 41% to 61 million year over year, with gross margin down 600 basis points to 57% due to higher chain penetration. Zigzag segment net sales were down 4% sequentially to $35 million for the quarter. Zigzag gross profit was $23 million. adjusted gross profit was 20 million, which is 57% of net sales, which is flat on a sequential basis. Second quarter free cash flow was $26 million and we ended the quarter with $268 million Pre-cash flow was positively impacted by a tariff refund of $18 million. In the quarter, we raised $60 million of equity to support long-term strategic objectives within Modern Oral. We are raising our full year 2026 modern oral growth sales guidance to 330 to 350 million from 280 to 300 million and raising net sales guidance to 260 to 270 million from 210 to 225 million. We are maintaining our full-year EBITDA guidance of $70 to $90 million, inclusive of increased nicotine pouch investments.
Budgeted 2026 CapEx remains $4 to $5 million, excluding projects related to Modern Oral. Our pending PMP application is progressing well and remain in process with the FDA. Although the process can be resource-intensive and timing can be uncertain, we have the expertise to succeed in dynamic regulatory environments. In support of our PMP applications, we expect to spend an additional $3 to $5 million in 2026.
Now let me turn it over to Graham. Thanks, Andrew. We continue to believe we are in the early innings of a generational shift in nicotine consumption And each quarter reinforces our confidence and our ability to compete and win in this evolving category. And with that, I'll now turn it over to questions. We will now begin the question and answer session.
limit yourself to one question and one follow-up. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. We ask that you pick up your handset when asking a question to allow for optimal sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Eric Delorier from Craig Hallam Capital Group.
Your line is now open. Please go ahead.
Great. Thank you for taking my questions. Congrats on another very impressive quarter here, especially on the top line for nicotine pouches. I mean, certainly clear that these growth investments are paying off. My first question here, just wondering how the conversations with C-Store chains are progressing, obviously, you know, several significant winds evidence in Q2. Just wondering how conversations with other chains are going. Do you see potential for additional winds in the second half of this year, or should we be more looking to, you know, kind of the spring times for shelf resets and additional for additional.
additional expansion games. Hey, Eric, thanks for the question. So as we've shared, we had some really great progress. in the spring with many, many of the large chains in our network. As you can imagine, and as the category is growing, those conversations with other chains that maybe didn't come on board in the spring will continue into the fall, which is typically when these reset seasons sort of pick up again. So I anticipate that we'll continue continue to have strong conversations in the fall and bring out into those conversations at that time as well. All right, that's great. And then my follow-up.
Could you just kind of touch on the timing or outlook for potential domestic manufacturing? Do you still see this as... you know, kind of tied to PMTA or needing to wait to hear from the FDA first, just any.
kind of commentary on how you're looking at domestic manufacturing would be helpful. Thank you. Yes, look, there's a couple of pieces to this equation. First and foremost, as we've mentioned on last calls, it was laying down the infrastructure in the U.S. You know, to be able to tap domestic manufacturing when the timing was right. You know, we've also mentioned, Eric, in the past that, you know, that there is a regulatory aspect to qualifying your U.S. manufacturing. And so we're just being mindful of the process and, you know, dedicating ourselves to to the PMTA sort of first and foremost in preparing the company, you know, to a place where, you know, as we get some positive of outlook there we're able to move quickly on domestic production.
Awesome. That's helpful, Kohler. Well, congrats again on all the progress, guys, and good luck going forward.
Thank you. Thanks, Eric. Thanks, Eric. Your next call comes from the line of Ian Zafino from Oppenheimer. Your line is now open. Please go ahead.
2. Question Answer
Hi, Greg. Thank you very much. Just trying to understand some of the puts and takes in the guidance. Obviously sales of Modern Oral is doing much better than expected, but then when I look at the EBITDA, roughly flat. maybe help us understand what the driver of that is. Is that just increased slotting fees? Because it seems like maybe things are going better than expected and you're having to pay higher slotting fees initially. Is that TKO, Salesforce? Maybe help us understand that. And then how do you then feel about leverage of a lot of those expenses going into the second half of the year as revenues ramp up. Thanks.
Thanks, Ian. So we are investing in durable brands, as we've mentioned in the script and as we've mentioned previously, and that is going to depress our earnings temporarily as we have these high costs. related to sales and marketing. We're confident in the EBITDA guidance that we've given. And as you've noted, over time, we anticipate EBITDA will grow as we mature in marketing and these sales investments.
Okay, thank you. And then, you know, when we think about domestic production, in the changing kind of tariff environment, where are we now as far as the savings? You'd realize onshoring the production versus kind of keeping your manufacturing production.
as it is now. Thanks. Yes, so as as we've discussed previously, We are in the midst of the PMCA and we have made progress here. and we're in good shape in terms of being able to ramp up as we progress through the PMTA process. Okay, and then one more. Yes. Yes. And then over the long term, our long term gross profit potential with US manufacturing, we are anticipating 70% gross profit margins.
Okay, perfect. Then I'm just squeezing in one more. The international kind of piqued my interest here. Maybe help us understand your go-to-market strategy there. I'd imagine you're not going to do a Folsom Salesforce there, maybe use more influencers, but,.
maybe give some color on the go-to-market strategy. Thanks. Yes, you're spot on with that. Um, you know, we view the international opportunity. I think, uh, the market saw the press release from ALP as they move into the EU. Much different than the US footprint in terms of how we We find partners internationally to take sort of the regulatory burden as well as the sales burden off of our shoulders. So there are no plans to ramp up a sales force in any country outside of the United States at this point in time.
Your next call comes from the line of Aaron Gray at Alliance Global Partners. Your line is now open. Please go ahead.
Hi, good morning and thank you very much for the questions. First question for me, I just want to go back to pouches and the guide. I had some real nice sequential growth in the quarter. It looks like the largest on an absolute dollar basis. So I just wanted to ask, was there any shipment timing impact in 2Q that could impact 3Q trends? and we're seeing continued momentum on expanded doors or replenishments within existing doors. Just try to triangulate maybe where you're at, you know, one half and specifically for 2Q relative to the guide for 2H. Thank you.
Yes, look, I would say there was nothing out of the ordinary in Q2. And as we've also mentioned in the past, Aaron, you sort of always have sort of puts and takes relative to when shipments go into our wholesale customers, when they go out to retail. As we continue to grow and scale the brand, we think that those are sort of somewhat of an offset, frankly. And look, I think that we're really excited about sort of connecting the marketing pieces that we laid down in Q2 and connecting that with the consumer retail, you know, on the free brand and then without very early innings, but we're excited about the early results that we've gotten, you know, relative to ALP in the stores that we placed it in.
Okay, great. Thank you. Second question, could you give any color in terms of your anticipation for the promotional environment over the next 12 months? Some peers have been calling out increased investment in the category and specifically noting the higher nicotine and moist pouch sections of the category as well. So any commentary there would be helpful. Thanks.
consistent on this, you know, over the last couple of years. We're really excited about the promotional environment because we think that, you know, leveraging the balance sheets of the large manufacturers, bringing new consumers into the category, you know, If you assume the category is going to double from here or more, that means that there's a lot more new consumers in the category. We think that the work that we're doing with scaling the brands and building these durable brand equities is going to connect with new consumers coming in the category, as well as give us the opportunity to compete against the existing consumers, which I think we've done. done very well up until this point in time. So what you think it's the category hopefully is still in the early stages at this point in time. And what we're trying to do is we're trying to create an environment where we're not intense on the promotional side of the equation. We're investing in shelf placement, visibility at retail, and also connecting brand equity building activities. around that to strengthen the brands and build a long-term premium potential for our product portfolio within this category.
Appreciate the call there. I'll jump back in the queue. Thanks, Aaron.
Your next question is from the line of Gerald Pasquarelli from Needham. Your line is now open. Please go ahead.
Great, thanks very much. Good morning. Thanks for the question. I wanted to ask about your growth to net sales dynamics in modern oral. Relative to your prior guidance, the updated outlook now implies a lower level of contra revenue as a percentage of your gross sales this year. I understand the spread was lower this quarter, but can you help us understand what's driving that? And I'm asking this because I'm wondering if it's fair to assume that you are potentially getting better in-store selling from free, following the prior distribution gains that you made into the large chains. So any color on those dynamics would be great.
Yes, look, the spread between gross to net is something that we're incredibly mindful of. I think you've got a bunch of different things that are occurring right now. Relative to our portfolio of products, when we've got strong ecommerce sales, and I think we've mentioned in the past that the gross to net ratio relative to our ecommerce is is not the same shape that you see in bricks and mortar, and so growth within the ecommerce environment I think is is, you know, tightens that spread up. I also think adding out in Q2 we took out sort of as we we took free in the early innings back in 2024 to the independent environment the independence are are less intensive from a spread gross to net and so I think you're seeing some sort of early green shoots of that activity. And then the last piece that I think you pointed out is, as we grow our sales base in reorders by the chain accounts, that also sort of helps with that variance. Understood. Thank you. Just to follow up on help.
you know, over the course of the quarter, we saw meaningful store ads in the measured channels. these ads were broadly consistent with the amount of door increases um you know that you have on your on your online store account um it seems like a lot of it is independent but can you just maybe provide some more color on the makeup of these like notable gains that we saw in 2q um maybe where the brand is getting the most traction and if you were potentially seeing incremental interest from the large chains to carry these products maybe a little earlier than you were.
anticipating at the start of the year. Thanks. Yes, Gerald, as you noted, the field sales organization as they're going down the street with ALP are currently primarily focused on independence and in some cases, regional change. really solid progress so far, as you also noted, and we'll start to see ALP carried into chain account conversations, the larger chain accounts that we've been talking about for free as we proceed into Q4 in the fall reset period and certainly into the spring. And we're excited given ALP's early traction and how those conversations will pan out. Perfect. Thanks very much for the call. No problem.
Your next question comes from the line of Nick Anderson at Roth Capital Partners LLC. Your line is now open. Please go ahead.
Yes, good morning. Thanks for taking the questions and congrats on the quarter. First for me, just on slotting, given the velocity from your brands within Modern Oral, has this changed slotting fee discussions with either your existing accounts or new ones you're trying to onboard? It feels like you'd have some more leverage given the performance of your products on the shelf. Any color there would be helpful.
Thank you. Hey, Nick, I'll start and Graham can chime in with any colors you'd like to add to. I think the promotional environment, the slotting fee environment, I think was pretty consistent in the spring in terms of what we were seeing. We anticipate that much of that will remain the same as we turn the page into Q4, but I think it's a bit early to predict what that will look like. Certainly as we bring ALP into the conversations, we'll take all of the learnings that we had from selling free in the spring and translate those into what we bring into the mix for ALP as well.
Okay, I appreciate that, Collin. Second for me, just on the regulatory landscape, recently a competitor got an MRTP designation that can now claim nicotine pouches carry lower health risks when compared to cigarettes. Just curious what you think this means in general for the modern oral category, both in terms of consumer perception and just the pending PMCA applications. And if this accelerates anything on the FDA side in terms of ruling on these products. Thank you.
You look, I think I think the news coming out of the agency relative to white pouch, whether it's, you know, MRCP or additional approvals is great news for the category. And so, from our standpoint, as the news comes out, and it's positive to that effect, we feel really good about where we sit and also. what the future potential is for the company. And so it's I think we do it as really positive news and anything that that allows the consumer more information relative to how these products perform and what they can mean to them from a long term use standpoint, we think is fantastic news. You know, I can't reiterate more that our focus is building our brands, building equity, working through the PMTA process. And we think that, you know, as consumers continue to flock into the category that we're really well positioned to win in the future.
Great. That's it for me. Congrats again on the quarter. Thank you, Nick. Appreciate it.
There are no further questions at this time. We have reached the end of the Q&A session.
I will now turn the call back to Graham for closing remarks. Hey, thanks, everybody, for joining the call this quarter. We're really excited about, you know, some of the results that we had coming into Q2. We think that there's great opportunity for long-term growth for this company and really excited about speaking to you here in the next few months.
This concludes today's call. Thank you for attending. You may now disconnect.
This live transcript is auto-generated without human intervention or review.
[Call has ended.]
Turning Point Brands Inc — Q2 2026 Earnings Call
Nicotine-pouch (modern oral) growth drove strong top-line gains while investments cut near-term EBITDA; management raised modern oral guidance.
📊 Quarter at a Glance
- Revenue: $143M (+23% YoY)
- Modern Oral: Net $68M (+128% YoY); Gross $87M (+149% YoY)
- Segment Mix: Modern Oral 48% of sales (up from 26% a year ago); Stoker's segment 75% of consolidated net sales
- Adjusted gross profit: $81M (adjusted) and 57% of sales after tariff refund adjustment
- Adjusted EBITDA: $15M (-50% YoY), 11% margin (adjusted earnings before interest, taxes, depreciation and amortization)
🎯 What Management Says
- Retail expansion: Chain store count expected to grow ~70% YoY by end of 2026; large-chain shelf resets to roll out over several quarters
- Sales infrastructure: Sales force to increase ~50% this year to support distribution, merchandising and in-store execution
- Onshoring goal: Target U.S. manufacturing launch by year-end (subject to regulatory approvals) to lower cost of goods and ultimately lift gross margins toward ~70%
🔭 Outlook & Guidance
- Modern oral sales: Raised to $330–350M (from $280–300M)
- Net sales: Raised to $260–270M (from $210–225M)
- EBITDA: Full-year guidance maintained at $70–90M despite higher pouch investments
- Capital & regulatory spend: Budgeted CapEx $4–5M (ex-modern oral); additional PMTA (Premarket Tobacco Product Application) related spend $3–5M; tariff refund aided near-term cash
❓ Analyst Q&A
- Chain timing: Management expects continued large-chain conversations into fall resets and incremental store adds through year-end and into spring
- Domestic manufacturing: Onshoring tied to regulatory approvals (PMTA); company has built infrastructure to move quickly once permitted
- Promotions & slotting: Higher marketing, slotting and sales investments are deliberate to drive trial; management expects expense leverage as scale improves but near-term EBITDA is impacted
⚡ Bottom Line
- Conclusion: Rapid modern-oral pouch growth validates the strategy and prompted upward guidance, but substantial sales/marketing and retail investments compress near-term profitability; regulatory timing (PMTA) and promotional/slotting dynamics are key execution risks for realizing targeted margins and U.S. manufacturing savings.
Turning Point Brands Inc — Q1 2026 Earnings Call
1. Management Discussion
Good morning, and welcome to the Turning Point Brands First Quarter 2026 Earnings Conference Call. [Operator Instructions] Please note that this event is being recorded.
I would now like to turn the conference over to Mr. Andrew Flynn, Chief Financial Officer. Please go ahead, sir.
Good morning, everyone. Earlier today, we issued a press release covering our first quarter results available in the Investor Relations section of our website at www.turningpointbrands.com. During this call, we'll discuss consolidated and segment operating results, the operating environment and our progress against our strategic plan.
Before we begin, please refer to forward-looking statements and risk factors in our press release and SEC filings. We'll also reference certain non-GAAP financial measures. Reconciliations and explanations are included in today's earnings release.
With that, I'll turn the call over to our CEO, Graham Purdy.
Thanks, Andrew. Good morning, everybody, and thank you for joining our call. We started the year with strong momentum, led by accelerating growth in Modern Oral with gross and net sales up 167% and 133% year-over-year and 30% and 26% sequentially. These results are driven by ongoing growth in both brands' D2C platforms, FRE's early expansion into larger, higher-volume chain accounts and ALP's very early move into bricks and mortar.
In the quarter, Modern Oral accounted for 42% of our total revenue, up from 21% in Q1 2025. Before we dive into details of the quarter, I want to step back and frame the opportunity in front of Turning point Brands. We believe we are in the midst of a greater than $50 billion generational shift in nicotine consumption, and we are positioning the business to capture meaningful share of nicotine users in this evolving high-barrier category. We are strengthening that position through foundational investments in our sales force, marketing and commercial capabilities. These investments are critical to building a durable growth platform that can scale into a leading player in the post-cigarette nicotine market over time. While this infrastructure will ultimately allow us to compete across the modern nicotine ecosystem, our priority today is clear: winning in nicotine pouches. We believe the nicotine pouch category is still in its nascent stages of development and can become the dominant revenue and profit driver of the company over time. As we've said before, we expect the market to consolidate around a limited number of scaled brands, and we are increasingly confident that FRE and ALP will be among them. Our confidence is grounded in execution. We continue to see encouraging consumer response across both FRE and ALP, supported by product quality, brand positioning and repeat purchasing behavior. Our outsized share of direct-to-consumer sales, coupled with our continued market share gains in bricks and mortar are evidence that our plan is working in the early innings.
Based on our Q1 performance, we believe our results captured mid-single-digit category share of both gross and net sales, giving confidence that we are on track to achieve our long-term goal of double-digit market share by the end of the decade. We are using that momentum to build scale across channels. FRE Continues to expand in the larger regional and national convenience chains, while ALP has moved from a strong direct-to-consumer base into retail faster than we originally expected. We've had several notable chain wins, driving confidence in our growth. We expect our chain store count to increase 70% by the end of 2026 versus the prior year. As you know, we are building an operational foundation to further support scale in Modern Oral.
Commissioning our Louisville manufacturing facility is an important step in localizing production, improving supply control and reducing freight and tariff exposure over time. As we build production, we expect that work to strengthen unit economics and support margin improvement as domestic inventory moves through the P&L. At scale, we believe our margins should approach 70% in this category by the end of the decade. We also continue to invest in the commercial infrastructure needed to support growth, including sales force expansion, chain account support, enhanced consumer visibility and manufacturing capabilities. In 2026, we plan to continue investing in our sales force and marketing to secure chain placement, build brand awareness and support our growing distribution footprint. Based on achieving our sales and financial objectives, we expect total sales and marketing investment for the year to range from $80 million to $105 million. Given the strong gross sales growth we have experienced, we are confident that these investments will provide attractive returns for investors over the long term. In short, we are making front-loaded investments in a category where acquiring brand-oriented adult consumers can drive repeat purchasing and strong margins over extended periods. Over time, we believe our investments in physical execution, particularly sales force expansion, distribution support and retail presence will become a more important source of competitive advantage.
Overall, we are encouraged by the momentum we are seeing, the progress we are making and the platform we are building to scale profitably.
With that, I'll hand the call over to Summer to walk through the progress of our key go-to-market initiatives.
Thank you, Graham, and good morning, everyone. I'll focus my comments on our go-to-market execution in the nicotine pouch segment. This remains our top commercial priority. And as we scale the business, we continue to benefit from the strength of our legacy distribution relationships and broader commercial capabilities. Our strategy is to build demand across both online and retail channels with retail expansion as the key lever to scale the business. To support that effort, we are investing in sales coverage, merchandising support and brand-building programs to help us win distribution and improve in-store execution. That includes securing the right assortment, shelf placement and visibility to support trial, repeat purchase and long-term performance. These investments support both near-term execution and the broader foundation we need to scale the business. In the first quarter, we made progress against that plan. We secured new wins across critical top chain convenience stores that will expand distribution across our portfolio. Our brands are designed to resonate with distinct consumers, and we will continue to promote the expansion of both FRE and ALP into retail stores. We believe our brand credibility, market performance and ongoing marketing support were important drivers of those wins.
While nicotine pouch gross sales grew nearly 500% in 2025, we still have meaningful room to build brand awareness relative to category leaders. Our early strategy was to establish distribution first using our existing retailer relationships to build a strong retail foundation. With the progress we made in 2025 and the additional distribution we have secured, we believe we are now at a point where increased brand investment can drive stronger returns. Over time, that should improve consumer awareness, support retail productivity and increase the value of the nicotine pouch opportunity. Accordingly, we are investing aggressively in brand building to support future scale.
Last month, we announced a partnership between [ FRE in 6 ] TKO properties, including UFC, Zuffa Boxing and PBR. This expansion is a result of the demand and brand alignment success we validated through our initial partnership with PBR, which started in May of last year. We believe this broader platform will help accelerate brand awareness and consumer engagement with adult consumers. We are off to a solid start, already having executed a few events since the announcement, and we'll share more as the partnership unfolds. Building on ALP's success in direct-to-consumer, this was the first quarter that TPB sales organization started to sell ALP on retail shelf. We began with a manageable launch and expect to incrementally add stores this year through our new chain account wins. While it's early innings, we are encouraged by the initial results.
With regards to Zig-Zag, we continued executing against our core brand pillars, strengthening the core business while scaling new product innovation and expanding brand presence in target markets. We accelerated growth in new products, including Natural Leaf Flatwraps by expanding retail distribution through targeted merchandising programs. At the same time, we are growing brand awareness with a focus on under-indexed markets through integrated marketing campaigns and in-store activations that embodies Zig-Zag's new "Life's Fast, Burn Slow" tagline. Overall, we are seeing encouraging early proof points across both brand building and retail expansion, and we believe that progress positions the nicotine pouch segment to become a major contributor to growth over time.
Let me now turn the call over to Andrew to go through our financial results.
Thank you, Summer. Starting with consolidated results. Sales were up 17% year-over-year to $124.3 million for the quarter. Growth was driven primarily by Modern Oral. Gross profit of $68.3 million increased 14.6%, driven by Modern Oral.
Gross margin was 55%, which was down 100 basis points versus last year. Reported SG&A was $55.8 million for the quarter, which was up $8 million sequentially. The increase was driven primarily by our nicotine white pouch investments, including approximately $1 million of incremental spend tied to expansion of our sales force. We also spent approximately $7 million on increased marketing investment and broader brand-building initiatives.
Adjusted EBITDA was $25.9 million for the quarter at a 20.8% margin, which exceeded the midpoint of the guidance. This was primarily attributed to accelerated growth in Modern Oral, offset by our strategy to increase sales and marketing investment and softness in Zig-Zag.
Stoker's segment net sales increased 48% year-over-year to $88 million for the quarter. The Stoker's segment now accounts for 70% of consolidated net sales. Regarding Modern Oral, I want to briefly address our disclosure of gross sales. Because most contra revenue investments relate to slotting-related distribution fees, we believe both gross and net sales provide the clearest view of underlying business performance. Support of our growth investments, Modern Oral nicotine pouch net sales FRE and ALP were up 133% year-over-year, achieving net revenue of $52 million. Gross revenue was $69 million, up 167% year-over-year. For the quarter, Modern Oral accounted for 42% of consolidated net sales, up from 21% a year ago.
Legacy Stoker's brands net revenue decreased 3.5% year-over-year to $36 million for the quarter, driven by continued share growth in MST that was partially offset by anticipated declines in loose leaf.
Stoker's gross profit increased 39% to $47 million. Gross margin decreased 350 basis points to 54% due largely to the impact of tariffs.
Zig-Zag segment net sales were down 22% year-over-year to $36.7 million for the quarter. For the quarter, Zig-Zag gross profit decreased 18% to $20.9 million and gross margin was 57.1%, which was up 300 basis points versus last year. First quarter free cash flow was negative $27.4 million, reflective of our investments in trade and brand marketing programs as well as working capital and U.S. manufacturing CapEx. We ended the quarter with $192.4 million of cash. Our expectation is to be approximately cash flow breakeven for the remainder of the year. Our capital allocation approach remains disciplined and aligned with the opportunity we see in nicotine pouch. As we invest behind growth initiatives, the timing of those investments and the timing of their benefits may not always align evenly within a given quarter. That reflects our effort to position the business to capture incremental share in a category with substantial long-term annuity value.
Today, we are increasing full year 2026 Modern Oral guidance. We now expect gross sales of $280 million to $300 million, up from a previous range of $220 million to $240 million. And net sales of $210 million to $225 million, up from our previous range of $180 million to $190 million. Implied gross revenue growth at the midpoint is 83.7%.
We are also introducing full year EBITDA guidance of $70 million to $90 million, inclusive of increased nicotine pouch investments in sales force expansion, merchandising support and consumer marketing. For modeling purposes, we expect the effective income tax rate to be 23% to 26% on a go-forward basis.
Budgeted 2026 CapEx is $4 million to $5 million, excluding projects related to Modern Oral, and we expect to spend an additional $3 million to $5 million this year to support our PMTAs.
Additionally, as we focus on strengthening our market presence, we expect to spend between $80 million to $105 million to expand our sales force and bolster our marketing strategy in 2026. As we continue to scale, we expect the overall cost structure of the business to become more efficient. Many investments we are making today, slotting related, brand building and go-to-market spend are tied to building distribution and driving initial trial and growth of our products. As our consumer base grows, these costs should become a smaller percentage of sales.
Now let me turn it to Graham.
Thanks, Andrew. We are encouraged by the momentum we see in the business and by the progress we are making against our strategy. As I said at the outset, we believe we are in the midst of a generational shift in nicotine consumption, and we believe Turning Point is uniquely positioned to capture meaningful share in that transition. Our focus remains on winning in Modern Oral by investing in the brands, commercial capabilities and infrastructure needed to scale. We are seeing continued proof points in both consumer traction and distribution growth, and we believe that positions us well to build a meaningful and profitable business over time.
And with that, I'll turn it over to questions.
[Operator Instructions] Our first question today will come from Eric Des Lauriers from Craig-Hallum Capital Group.
2. Question Answer
Congrats on the strong results. Very encouraging to see nicotine pouch sales reaccelerating into Q1 here. So you raised guidance for Modern Oral net sales by about $30 million and then gross sales by about $60 million. So suggesting a big increase in contra revenues with these national chain wins. How did these wins announced today compared to your expectations coming into the year? Have you won more chains than initially expected? And any national chains that we should expect for both FRE and ALP? Or is it mostly FRE right now?
Great question. Thanks, Eric. We were really, really excited about the springtime negotiations that we worked through over the past few months. As Graham noted in his comments, we expect our store count to increase by nearly 70% by the end of the year. I think as you know, every chain account is different. So we're currently in the process of determining the rollout schedule and the [ doors ] will come online over the balance of the year. Where we have opportunities to bring both brands in, we will. So you'll hear more about that as the year rolls out, and we're encouraged and excited about the success that we had over the past few months.
Yes. No, it certainly sounds very exciting. And I guess, Summer, you touched on this in your answer there. And maybe it's just sort of, we'll see over the next couple of quarters. But how should we think about the timing from these wins? When should we expect to see them on shelves? And then how should we think about the sort of impact on gross versus net sales? Should we look for net sales to sort of pick up from these in the back half? Or is that more of a 2027 thing?
Yes. I'll answer the first part, and then I'll turn it to Andrew to answer the second part. But you'll start seeing some of these chain wins roll out over the next few weeks. But as the progress of rolling out these chains requires resets and fixtures and different dynamics that they're sorting out with getting everything situated in store, it just takes time. So you'll see those stores sort of fill out across the balance of the year, but I'll turn it to Andrew to explain how we thought about the dollar impact.
Yes. As we think about the net sales trajectory over the course of the year, we would expect to see some pickup in the back half as it relates to the Modern Oral category.
Awesome. Well, it's all very encouraging. Congrats again on the strong results.
Thanks, Eric.
Your next question comes from Ian Zaffino from Oppenheimer.
Great guidance on that DMO side. So question would be on the PMTA process. How is that going? I know there's [indiscernible] articles about that. And any kind of change in discussions there or thoughts about getting kind of final approval? And then how are you thinking about the Louisville plant, which I guess they're kind of connected a bit.
Yes. Great question, Ian. Look, the PMTA process is -- it's a rigorous scientific process. We're not surprised by the timing, to be frank. And our approach is, we respect the process and any additional commentary around sort of where we're at on that frontline probably wouldn't be appropriate at this time.
In terms of Louisville manufacturing, we're threading a bit of a needle here with respect to the PMTA process, and scaling our infrastructure here in Louisville. We've made really great progress relative to laying down the infrastructure to support manufacturing here in Louisville. We've certainly got equipment in Louisville, and we feel really good about where we're at from a throughput on those machines in the early innings.
Okay. And then I guess maybe a question for Summer is when you're going to market out portfolio, I guess you now have a newly expanded portfolio. And so how are you going to market? Are you going to market as far as FRE being your higher nicotine pouches and ALP being your lower nicotine pouches? Is that the strategy? And also, can you maybe talk about this portfolio -- expanded portfolio, which has significantly more SKUs, how that's resonating with retailers bringing them incremental SKUs? And any other kind of color you could give us maybe about the maybe synergistic effects of having those 2 brands together?
Yes, sure. So I would say the retailers, our consumers and our sales organization are all very excited about us having both brands in the portfolio and in the sales bag to bring to market. And what's been great about both of these brands is that they've built a strong base with consumers, especially ALP, they've created a really strong D2C presence, and there was some pent-up demand at retail that we were really able to start leveraging. And as these brands are being put into market, we're really thinking about the end consumer. So while the product itself is important and they certainly have their differences, what's resonating with retail, what's resonating with consumers is that these brands are really focused on 2 very distinct consumer bases. There is room in this category for both brands to win, and we've seen some really encouraging early results as we've been bringing them to market.
Next up is Nick Anderson from ROTH Capital Partners.
Congrats on the quarter. First for me, just on the rising fuel price environment, have you seen any impact on C-store visits or consumer behavior? Tobacco is typically more resilient when it comes to higher fuel prices. Are you seeing the same trend emerge within nicotine pouches? Just any discernible changes to [indiscernible] would be helpful.
I think given the backdrop of our results, we feel really good about sort of where we're at today with the consumer. As Summer had mentioned in the last question with Ian, we're really focused in on building brand equities, building brand identity and really winning on the premium front over the long haul. We view the fuel prices as transient. We think where we generally see that more so is in the heritage businesses. And I think what's an interesting aspect of that, historically, consumers tend to not move out of the categories. They tend to look for more value. And I think we feel very well positioned with our Stoker's heritage products with respect to spiking gas prices.
Great. That's helpful. Second for me, just on the retail landscape. With the momentum from TKO and brand awareness obviously ticking higher here, have you seen a difference in appetite for [indiscernible] to change the carry FRE and ALP? As brand recognition grows, I would assume your negotiations should become smoother, but any color there would be helpful.
Great question. We are really excited about the TKO deal. As you know, we invested in PBR last year. We learned a lot, and that gave us some momentum to build upon because I think having this TKO deal really has us show up as a credible partner that's investing for the long term to win with our brands. And so certainly, while it's early, it has been part of the conversation with retail. We've seen some early consumer excitement. We have some events under our belts and more to come as that partnership unfolds, but encouraged about the credibility it brings to us and sort of the proof point that comes to the table of us being a brand and a company that's investing in the long term here.
The next question is from Gerald Pascarelli, Needham & Company.
This is Jack on for Gerald. As for as EBITDA guidance, it obviously implies a decline relative to last year, which at this point, I think is well understood, but the range is pretty wide. So could you just kind of go through some assumptions that get you to the high end versus the low end?
Sure thing. So look, what's driving the EBITDA guide is, as we discussed, we've got big investments in terms of sales force, retail distribution as well as marketing spend. And so those are the big drivers of the year-over-year change. Also, as you know, our freight -- our outbound freight costs are captured in SG&A. That's also up on a year-over-year basis. And so what's kind of driving the range here is, one, the biggest driver is our ability to get that spending and what we will spend on in the future. And so that spending is dependent on what we see in terms of sales because we'll be able to pivot if needed. And we're being judicious about that investment. And so as we monitor it, we may make some changes. So that's really the reason for the guide. And also, there could be a real upside opportunity in terms of the TKO agreement that we just launched, this is very new. And also some of these chain wins are also very new, and that can provide a very large upside for us as well.
Okay. That's helpful. And then for the UFC sponsorship, it looks like it can be pretty transformative. It's incremental to your OpEx outlook relative to last time you presented. So as we kind of look forward, is there the potential for Turning Point to enter into some more of these sponsorships? And then if so, can that imply another leg down on EBITDA? Or do you think the low end is the floor at this point?
I'll take the first part of that question, and Andrew may want to chime in on the dollar aspect. But as you know, investing in TKO is a bet for us, we're really excited about. We are also doing other marketing activities, other consumer engagement building activities like with motorsports and other avenues. And so I think to Andrew's point, we will invest prudently as we go and make changes as we may need to, but excited about the awareness opportunity this gives for the brands, and I'll turn it to Andrew on the dollar aspect.
Yes. In terms of what that may mean for the low end of guidance, as I said before, we're going to be judicious about our spending. And so if something makes sense for us to gain incremental market share, we will do that. And so that's really how we think about these opportunities.
And everyone, at this time, there are no further questions. I'd like to hand the conference back to Mr. Graham Purdy for any additional or closing remarks.
Thanks, operator. I really want to thank everybody for joining the call today. Look, in closing, I think, ultimately, I want to emphasize a couple of points to our investors. For one, I've been in this industry for -- I'm closing in on my 30th year, and I can't tell you how excited I am about the opportunity in front of us with the generational transformation that we spoke of earlier in the script. And what -- how TPB fits into that long term, I think, is incredibly exciting.
The Modern Oral opportunity, it's real. It's gaining momentum. I think you're seeing early progress from our company that across our D2C platforms and progress we're making in bricks and mortar gives us a lot of enthusiasm around where we're at in terms of harvesting that long-term opportunity. As Andrew mentioned, our investments in this category are going to be incredibly disciplined and ultimately tied to our sales objectives in this category.
And I think lastly, the heritage business for us is still very important. It provides strong cash flows for the company, and it gives us cash flow to invest in the future and ultimately harvest the opportunity that we see in front of us. So it's really exciting times at Turning Point Brands. And with that, I'll sort of close by saying, I look forward to talking to you all in a few months here and updating against our progress against the plan. So thank you so much for joining.
Once again, everyone, that does conclude today's conference. We would like to thank you all for your participation. You may now disconnect.
Turning Point Brands Inc — Q1 2026 Earnings Call
Turning Point Brands Inc — Q1 2026 Earnings Call
TPB shows strong momentum in Modern Oral with raised 2026 targets and strategic investments to scale the nicotine pouch platform.
📊 Quarter at a Glance
- Sales: $124.3m (+17% YoY)
- Gross Profit: $68.3m (+14.6% YoY)
- Gross Margin: 55% (down 100 bps YoY)
- SG&A: $55.8m (+$8.0m QoQ)
- Adj EBITDA: $25.9m (20.8% margin; above midpoint)
- Stoker's Net Sales: $88m (+48% YoY)
- Modern Oral Net Sales: $52m (+133% YoY); 42% of consolidated net sales
- Modern Oral Gross Revenue: $69m (+167% YoY)
- Zig-Zag Net Sales: $36.7m (−22% YoY)
- Free Cash Flow: −$27.4m
- Cash: $192.4m at quarter end
- 2026 Guidance: Gross Sales $280–$300m; Net Sales $210–$225m
- EBITDA Guidance: $70–$90m
- Tax: 23–26% going forward
- CapEx: $4–$5m (excluding Modern Oral); PMTA-related $3–$5m
- S&M: $80–$105m in 2026
- Cash Flow View: expected near breakeven for remainder of 2026
🎯 What Management Says
- Strategy: Focus on Modern Oral to capture a generational shift in nicotine, building a durable growth platform with disciplined brand and go-to-market investments.
- Scale & Infrastructure: Expanding sales force, merchandising, and distribution; Louisville manufacturing to strengthen supply control and unit economics.
- Long-term Profitability: Margin target in Modern Oral converging toward ~70% at scale by decade’s end; front-loaded investments aim to drive durable share gains.
- Portfolio & Partnerships: Leveraging FRE and ALP alongside Zig-Zag; new brand collaborations (TKO properties) to accelerate awareness and retail impact.
🔭 Outlook & Guidance
- Guidance: 2026 gross sales $280–$300m; net sales $210–$225m; EBITDA $70–$90m.
- Investments: S&M $80–$105m; CapEx $4–$5m plus $3–$5m PMTAs; tax 23–26%.
- Cash Flow: near breakeven for remainder of 2026 as investments scale.
❓ Analyst Q&A
- Chain rollouts: Store rollouts accelerate in 2026; near 70% more chain doors by year-end, with some rollouts in the back half as resets occur.
- PMTA & Louisville: PMTA timing remains rigorous; Louisville progress advancing with early throughput improvements while awaiting approvals.
- Portfolio & Sponsorships: FRE/ALP portfolio is being leveraged across retailers; TKO/UFC sponsorships boost brand awareness but keep spending prudent.
⚡ Bottom Line
TPB’s quarter confirms Modern Oral momentum and raises 2026 targets, supported by investments to build scale. While near-term cash burn rises, the plan aims for stronger long-term margins and market share in the nicotine pouch category. Execution risk includes PMTA timing, chain-rollout speed, and the effectiveness of front-loaded marketing investments.
Turning Point Brands Inc — Q4 2025 Earnings Call
1. Management Discussion
Good morning, and welcome to the Turning Point Brands Fourth Quarter 2025 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded.
I would now like to turn the conference over to Andrew Flynn, Chief Financial Officer. Please go ahead.
Good morning, everyone. Earlier today, we issued a press release covering our fourth quarter results. available in the Investor Relations section of our website at www.turningpointbrands.com. During this call, we'll discuss consolidated and segment operating results, the operating environment and our progress against our strategic plan.
Before we begin, please refer to the forward-looking statements and risk factors in our press release and SEC filings. We'll also reference certain non-GAAP financial measures. Reconciliations and explanations are included in today's earnings release.
With that, I'll turn the call over to our CEO, Graham Purdy.
Thanks, Andrew. Good morning, everyone, and thank you for joining our call. We are pleased with how the year wrapped up and the momentum we built for 2026. Revenue increased 29% to $121 million for the fourth quarter, including $41.3 million in Modern Oral net revenue. Adjusted EBITDA increased 14% to $30 million for the quarter. We are initiating 2026 Modern Oral gross revenue guidance at a range of $220 million to $240 million in Modern Oral net revenue at a range of $180 million to $190 million.
As we've stated in the past, we are ready, willing and able to increase our investment behind our white pouch brands and expect a portion of that investment to be accounted for as contra revenue under GAAP. Accordingly, we think it's valuable for us to provide transparency into difference between gross and net to evaluate our progress over time. Our focus is on building lasting consumer relationships that require front-loaded investment. Once consumers enter the franchise, we tend to see consistent repeat purchasing that supports revenue over many years. While this category is still in the early stages, we believe the average consumers with lifetime value could last decades.
In addition, we expect first quarter 2026 consolidated adjusted EBITDA to be between $24 million and $27 million. We are currently working on several significant and exciting sales and marketing initiatives and investments for white pouch that make it difficult to accurately project EBITDA beyond Q1. Obviously, when looking back at 2025, we are most pleased with the growth of our white nicotine pouch brands, they're long-lasting vibrant flavor options, comfortable mouth feel and flexible nicotine levels continue to win with consumers.
Both FRE and ALP have cultivated strong brand identities that resonate with their respective consumer bases. During the quarter, net white pouch sales increased by 266% year-over-year and gross sales increased 337%. We continue to make progress expanding freeze distribution to large regional and national c-store chains and ALP already one of the top [ D2C ] pouch brands in America, has started to appear on bricks-and-mortar shelves in select retailer tests. Recall that we initially expected ALP to be exclusively D2C for all of 2025. Suffice it to say, we are pleased ALP's running ahead of schedule, and we expect to significantly expand bricks-and-mortar distribution about during Q2.
We believe the nicotine pouch space, like most other nicotine businesses, will ultimately feature 5 to 6 widely distributed brands that command most of the market. Analysts expectations for the size of the category differ the most believable approach, if not exceed, $10 billion in manufacturers revenue by the end of the decade. Our Q4 performance and sales growth trajectory support our long-term target of double-digit market share in the category.
In order to best position the company to capitalize on this multibillion-dollar opportunity we have made and will continue to make significant investments in the business and refine our route-to-market strategy to prioritize FRE and ALP while continuing to generate strong cash flow from our [ heritage brands ]. Key investment initiatives include reallocating sales and marketing resources, increasing the head count of our sales force, improving our online presence, ramping up investment in chain accounts, pursuing brand-enhancing partnerships, expanding to international markets and building out U.S. manufacturing for our white pouch brands.
We are pleased with our progress on the manufacturing front and expect to qualify the first production lines at our new [ ruble ] factory over the next several months. We've been particularly encouraged by our ability to identify and onboard new sales talent. We are ahead of schedule in our goal of doubling the size of our sales force.
The rest of the Stroker's segment portfolio also performed better than expected in the quarter. Overall, Stoker's net revenue increased 70% to $81 million reflecting a 9% increase in our legacy brands and the [ aforementioned ] 266% increase in Modern Oral revenue. During the fourth quarter, Zig-Zag revenue was down 13% to $40 million and 9% sequentially. This decline was as anticipated and in line with expected opportunity costs with our laser focus on Modern Oral.
With that, I'll hand the call over to Summer to walk through the progress of our key go-to-market initiatives.
Thank you, Graham. As he noted, we continue to make significant investments to support our go-to-market strategies, prioritizing FRE while also maximizing the cash flow from our legacy brands. Throughout the quarter, we continued to expand our efforts and our initiatives to support the growth of FRE, focused on sales and marketing. We remain committed to optimizing our approach to expand distribution, improving brand merchandising and ensuring adequate inventory conditions.
We are seeing the early benefits of the new sales and merchandising tools referenced in prior quarters, which are enabling our sales team to secure the ideal assortment, establish shelf space and execute a premium look and feel at retail. We finished 2025 strong with our continued progress in large-scale chains and look forward to sharing further progress throughout 2026. We were grateful to have recently spent time with some of you at the sold-out Professional Bull Riding event in Madison Square Garden. These events are high octane and nationally televised providing a unique opportunity to engage with our consumer base and build brand awareness.
We look forward to sharing other opportunities that we're exploring, which align with FRE's Own Your Edge, tagline and brand [ ethos ]. With regards to Zig-Zag, we continued executing product, retail and cultural initiatives that build upon our 145-year legacy and strengthen our premium position across the segment. During the quarter, we advanced the rollout of natural lease flat wraps, expanding distribution and awareness in this fast-growing tobacco segment. We also supported trial of our legacy paper products through targeted regional programs and sampling tied to major sporting weekends in key markets.
We continue to advance the brand's evolution into a lifestyle platform with new apparel lines and culturally relevant brand activations that embody Zig-Zag's life fast burn slow ethos. In the quarter, we also had some exciting news from Stoker's with the launch of a new flanker brand, Stoker's Proud. Stoker's Proud offers a traditional long cut while delivering the same 100% American-made quality dip that Stoker's is known for. It's designed to attract value-seeking can consumers while insulating the broader brand from category pricing pressure. We'll share more about this expansion in coming quarters.
In closing, we continue to build our brands for the long term, execute and deliver against our omnichannel plan and win consumers. Our focus is to prioritize strategic investments that maximize the value of our world-class brands and further strengthen and leverage our distribution capabilities.
Let me now turn the call back over to Andrew to go through our financial results.
Thank you, Summer. Sales were up 29% year-over-year to $121 million for the quarter. Growth was driven primarily by Modern Oral, while we continue to invest in sales and marketing to support that expansion. For the quarter, gross margin was 55.9%, which is flat versus last year. Reported SG&A was $47.7 million for the quarter, which was up $3.1 million sequentially, the increase is driven by our planned commitment to invest in Modern Oral related sales and marketing as well as increased outbound freight charges. Adjusted EBITDA was up 14% year-over-year to $30 million for the quarter, at a 24.8% margin.
Going into segment performance. Zig-Zag segment net sales were down 13% year-over-year to $40 million for the quarter, which was in line with our expectations. For the quarter, Zig-Zag gross margin was 54.6%, which was up 40 basis points versus last year. Stoker's segment net sales increased 70% year-over-year to $81 million for the quarter. The Stroker's segment now accounts for 67% of consolidated net sales. Legacy Stoker's brands increased by 9% year-over-year to $39.7 million for the quarter, driven by continued share growth in [ MST ] that was partially offset by anticipated declines in loose leaf.
Modern Oral nicotine pouch net sales FRE and ALP were up 266% year-over-year achieving total revenue of $41.3 million. For the quarter, white pouch now accounts for 34% of consolidated net sales, up from 12% a year ago. We ended the quarter with $222.8 million of cash. Free cash flow for the fourth quarter was $19.2 million. CapEx for the quarter was $3.3 million. On to guidance and other items, as previously noted, we are initiating full year 2026 Modern Oral gross sales guidance of $220 million to $240 million and net sales guidance of $180 million to $190 million. We expect first quarter 2026 EBITDA of $24 million to $27 million, inclusive of increased white pouch sales and marketing investments.
For modeling purposes, the effective income tax range is 23% to 26% on a go-forward basis. Budgeted CapEx for 2026 is $4 million to $5 million, exclusive of projects related to our Modern Oral business. We expect to spend between $3 million to $5 million for the full year to supplement our Modern Oral PMTAs.
Now let me turn it back to Graham.
To conclude, we are pleased with our year-end results and excited about our prospects for 2026.
I'll now turn it over to questions.
[Operator Instructions] Our first question comes from the line of Eric Des Lauriers with Craig-Hallum Capital Group.
2. Question Answer
Congrats on another very impressive quarter here. First one for me on the investment opportunity. So you mentioned you're already willing and able to invest in nicotine pouch growth this year. It sounds like you have some investments picking up in Q1 with that EBITDA guide.
Just wondering if you could provide a bit more color on the sales and marketing sort of opportunities that you see in front of you right now? And just how we should be thinking about that for this year?
Eric, Andrew here. for the question. So yes, the way we're thinking about the EBITDA guide is that we are investing in sales and marketing. And we're also preparing ourselves for the launch of ALP in bricks and mortar in Q2. So we'll need to invest dollars upfront in order to have a successful launch in the second quarter.
All right. That's helpful. And then on domestic production, it's nice to hear the progress there. I think you said initial lines to be qualified in the coming months. Could you just expand on the domestic production outlook for the year, whether that's how many lines you expect to bring online? Or how do you think about the mix of domestic versus international production and how that should evolve throughout the year?
Yes. So we expect to qualify the lines in the next couple of months. And really, what we've done is we've -- in 2025, we spent CapEx dollars investments in infrastructure of the building. These are things like HVAC systems, electrical, plumbing, et cetera. We've got those lines and those lines are becoming more efficient week by week. So we're encouraged with the progress that they've made.
We will have -- we will continue to use our Indian partner because both brands are growing. And so the U.S. will supplement the growth. So we think that between the 2 locations, we'll have no supply chain constraints, in terms of enhanced margins, it's going to take a while to get the inventory out of the -- in the U.S. and through our P&L. So we expect to see some green shoots in margin enhancements towards the end of the year.
But one thing I will say is what we're doing to help with the margin profile is we are very much focused on freight. Our inbound freight. There are some opportunities for us to optimize there, and we've taken advantage of that.
Our next question will come from the line of Ian Zaffino with Oppenheimer.
As far as the investment and the ramp of Modern Oral, what should we expect as far as timing of all this investment? And maybe the better way to ask it is what does that investment look like exiting '26? So how much will it come down? And maybe what are your view as kind of a sustainable rate?
Yes. I think the way we're thinking about it is that the investment will be somewhat lumpy through the year as we see opportunities to invest that we think are high ROI projects, we will do that. And so to give you an exact figure in terms of investment ratio, I think it's going to be -- it's going to modulate quarter-to-quarter.
Okay. And then would you be able to give us kind of a sense of what to expect as far as the store count ramp for ALP? Should it be similar to what we've seen in FRE recently? Just maybe use that as a benchmark.
Yes. Thanks, Ian. Look, I think that we're, number one, incredibly excited about the ALP launch in Q2. We've laid some groundwork here as of late. And so we think that we're going to come out of the gate very strong there.
As we think about it, we're entering 2026 with a ton of enthusiasm and a ton of excitement around both potential for FRE and ALP and really putting some investment dollars behind that to yield the strong growth. That said, we think that the store count growth will probably look similar to the sort of early days of the FRE launch. As we focus in and hone in on areas where we've gotten free distribution currently, so we can round up the portfolio inside of those particular retail stores. And we have a specific focus around fee this year with chain wins. So we're pretty excited about sort of all the above relative to both FRE and ALP.
Our next question comes from the line of Aaron Grey with Alliance Global Partners.
First question for me, just want to piggyback off the last 1 here and maybe focus more on that free distribution, which you just alluded to there, Graham. So I appreciate the color that you provided on ALP distribution, but for FRE, which has been kind of the main horse for brick-and-mortar distribution.
It seems like you still see some opportunities for wins in white space in 2026. So maybe some more color in terms of expectations there? And you mentioned some change there, so I know that can be sometimes a big step change in uncertainty in terms of the timing. So any color there would be appreciated.
Yes. Look, I think that there's still tremendous amount of store opportunity out there in both sort of the chain environment, which we view as substantial at this point in time. as well as continued growth in our independent customers. We also see green shoots relative to the level of distribution that we have in stores and specifically our share of shelf and what we see in our internal in terms of what that yields.
So it's not necessarily at all times about raw store count adds. It's about the maturity of each of the stores that we get in distribution and making sure that we're winning inside those specific stores, but we do expect continued store growth this year. It may be a little bit lumpy relative to when chains come online, but we continue to expect upward trajectory there.
I appreciate the detail there. Second question for me. I just wanted to get some control of how are you thinking about innovation in the category, the need to stay ahead on that front as other large players aim to introduce new products, particularly given the FDA's new fast track PMTA program.
So I know we've talked about flavors a lot, but also more it seems like that's a big initiative for some of the larger players. So how are you thinking about innovation in the category? Any color there would be helpful.
Yes. Look, I think our first focus is winning with the existing products that we have. We think we have a tremendous edge relative to our flavor profiles, our satisfaction levels within our product, our moisture level, the majority of the category today is sold in sort of the [ Montandintergreen ] environment. We feel very confident that we're sort of covered up where the biggest portion of the market is.
In terms of long-term innovation, as we continue to grow our store count, we continue to grow the business, we certainly see opportunities down the road to make some investments behind additional flavor options. But at this point in time, we think we've got a portfolio with both FRE and ALP that we can win.
Our next question comes from the line of Nick Anderson with ROTH Capital Partners.
First one for me, just on nicotine pouch consumption, it looks like U.S. consumers are using more on a per day basis than they were a year ago. But that's still well below some of the more developed international regions. Just curious how you see growth evolving in this industry near term? Will it be more from existing consumers using more or new users entering the category? Any color there would be helpful.
I think the great news is both. And as you pointed out, the consumption patterns of existing consumers continues to grow as Modern Oral becomes a greater share of their nicotine requirements. And as you see the growth in the category, certainly, we're seeing consumer uptake from other tobacco products, specifically cigarettes and even vapes. So I think it's just a tremendous opportunity where sort of both provide growth vectors for the category.
I appreciate that. Second one for me on the tax landscape within Modern Oral, but we're seeing several safe considering tax hikes on nicotine pouches. Just wondering if you could provide some color on the potential for these increases this year. And just how that might impact the pricing and promotional environment going forward?
Yes. So taxes are something that the tobacco companies have dealt with for decades now. And I think the good news on the tax front is if you think about taxation in a specific state level, it impacts every product that's within that state. So there's no disadvantage for one manufacturer or another manufacturer relative to the tax landscape.
We would anticipate that taxes will, over the long haul, will continue to grow and look more like sort of the existing tobacco products. But for us, that the absolute opportunity of winning inside the states where taxes are aren't at this point in time, that doesn't really matter to us because playing fields level, and we think we've got a winning product.
Our final question will come from the line of Gerald Pascarelli with Needham & Company.
Great. I know you don't provide a breakout by brand, understandable, but I was hoping that you could maybe broadly unpack for us the revenue performance between FRE and ALP this quarter. Just wondering specifically if you saw a slowdown in ALPs [ DTC ] growth or if you had better-than-expected performance in FRE, which we know is lower gross margin?
So the basis of the question is just trying to reconcile some of the drivers behind the negative mix that you cited in terms of the Stoker's segment level gross margin in the quarter. So any color there would be great.
Yes. For internal reasons, we haven't split out specifically ALP in FRE. But what I can say is both brands performed within our expectation in the quarter.
Okay. And then for Graham, just I guess, a high-level question. Now that we're through year 1 of the white pouch rollout, if you could just talk about any learnings you've had where you view the biggest white space opportunities from a distribution perspective? And how you balance getting into some of these larger national chains, which are seemingly more expensive versus maybe doubling back to retail locations where you're currently present and where you've done very well historically to get more shelf space and more facings to build out your presence at some of these retail locations you're currently in? So any color there would be great.
Sure. Sort of reference prior answer here on this call. Sort of green shoots all over the place for us. When you think about the leaning into ALP and the retail distribution there as we ramp that tons of white space. It's virtually all white space for ALP out there, FRE still a tremendous amount of store level distribution opportunities. Still a tremendous amount of opportunities relative to expanding the portfolio inside of existing stores.
And so we're focused on really all of the above because we think that there's so much opportunity out there. We've made a tremendous amount of investment in our sales force to really solidify sort of the ground troops to be able to go out and tackle that opportunity. You can see sort of how we're thinking about this coming year and ramping up our investment, we think that there's opportunities to invest in trade programs. There's opportunities to invest in further strategic partnerships to build out our brand profiles.
And so ultimately, what we think is long term, brands are going to win in this space. And for us, we think about ALP as probably one of the leading sort of brand properties in the space given the connection there. The large [ D2C ] footprint, FRE has done a great job relative to leaning into its equities with the [ Probo Writing ] Association partnership. We think that there's other opportunities out there that we're incredibly excited to invest behind. And so I think that it's really all of the above, more stores, more facings, more product in there for both FRE and ALP. And we think as we continue to build the brand profiles that we have a winning combination and ultimately, our goal is to be a strong challenger brand in the space where we think, the combination of those two brands could achieve a #4 position in the space and maybe with a little bit of upside.
I do want to circle back to your first question about the gross margin performance in Stroker's. So one thing to keep in mind is that we had an elevated tariff rate in the fourth quarter. And so that had an impact on the Stroker's margins because of the white pouch. We did -- we had an [ add ] back in EBITDA, but that's in the adjusted EBITDA. It's not in the gross margins.
This concludes our question-and-answer session, and I will now hand the call back over to Graham for any closing comments.
Thank you, operator. Really appreciate everybody getting on the call. We feel great about how we finished 2025. And I can tell you how enthusiastic and excited we are about the opportunities in front of us in 2026. So we look forward to talking to you in a few months here, and we'll talk to you then.
This concludes today's call. Thank you all for joining. You may now disconnect.
Turning Point Brands Inc — Q3 2025 Earnings Call
1. Management Discussion
Good morning, and welcome to the Turning Point Brands Third Quarter 2025 Earnings Conference Call. [Operator Instructions] Please note that this event is being recorded.
I would now like to turn the conference over to Graham Purdy. Please go ahead.
Thank you, operator. Good morning, everybody, and I really appreciate you all joining the call. A little bit of a somber morning here for us in town here. Before we walk you through our Q3 results, I'd like to say a few words about the tragedy that hit our community yesterday with the UPS flight crash. As I'm sure you're aware, we're a Louisville-based company. Aside from being a business partner of ours, UPS is really woven into the fabric of the Louisville community. In many ways, Louisville is a -- it's a very small town and the community is very tight-knit. And while we're fortunate that none of our employees were directly impacted or affected by the tragedy yesterday, it's likely that we have friends and loved ones that know somebody that was. Our heart goes out to the families of those that were directly impacted by the tragedy and then to the UPS family as they deal with this heartbreaking situation.
And so with that, I'd like to turn the call back to the operator to get started.
Thanks, Graham. Now I would now like to turn the conference over to Andrew Flynn, Chief Financial Officer. Please go ahead.
Good morning, everyone. A short while ago, we issued a press release covering our Q3 results. This release is located in the IR section of our website at www.turningpointbrands.com. During this call, we will discuss our consolidated and segment operating results and provide some perspective on the operating environment and progress against our strategic plan.
As is customary, I direct your attention to the discussion of forward-looking and cautionary statements in today's press release and the risk factors in our filings with the Securities and Exchange Commission. On the call today, we will reference certain non-GAAP financial measures. These measures and reconciliations to GAAP are in today's earnings release, along with reasons why management believes they provide useful information.
I will now turn the call over to our CEO, Graham Purdy.
Thanks, Andrew. Good morning, everyone, and thank you for joining our call. Our consolidated third quarter results were better than expected and demonstrated continued progress against our plan. Revenue increased 31% to $119 million for the quarter, including $36.7 million net Modern Oral revenue, which includes $1.5 million of slotting fees that are accounted for as contra revenue. Adjusted EBITDA increased 17% to $31.3 million for the quarter. We are increasing adjusted EBITDA guidance to a range of $115 million to $120 million, up from $110 million to $114 million. We are increasing full year consolidated nicotine pouch sales guidance to a range of $125 million to $130 million, up from $100 million to $110 million. This includes both FRE and ALP.
We are particularly pleased with the growth of our white nicotine pouch brands. Their long-lasting vibrant flavor options, comfortable mouth feel and flexible nicotine levels have resonated with consumers. During the quarter, white pouch sales increased 628% year-over-year and 22% sequentially. Some of you may have noticed that ALP, already one of the top D2C pouch brands in America, has started to appear on bricks-and-mortar shelves in select retailer tests. Recall that we initially expected ALP to be exclusive D2C for all of 2025. Suffice it to say, we are pleased that ALP is running ahead of schedule.
We believe the nicotine pouch space, like most other nicotine businesses, will ultimately feature five to six widely distributed brands that command most of the market. Analyst expectations for the size of the category differ, but most believe it will approach, if not exceed $10 billion in manufacturers revenue by the end of the decade. Our Q3 performance supports our long-term target of double-digit market share in the category. In order to best position the company to capitalize on this multibillion-dollar opportunity, we have made and will continue to make significant investments in the business and refine our route-to-market strategy to prioritize FRE and ALP, while continuing to generate strong cash flow from our heritage brands.
During the quarter, we raised $100 million of gross proceeds under our previously announced at-the-market offering program at an average share price of $98.59. We expect to opportunistically deploy this capital across a variety of high-return opportunities to accelerate the growth of our Modern Oral business. Consistent with our policy of maintaining active buyback and sales authorizations to maximize capital markets flexibility, we plan to update our ATM prospectus supplement and buyback authorization to provide for $200 million of capacity under each program. We have no current plans to transact under the updated authorizations.
Key investment initiatives include reallocating sales and marketing resources, increasing the headcount of our sales force, improving our online presence, ramping up investment in chain accounts, expanding to international markets and building out U.S. manufacturing to improve white pouch profitability and mitigate supply chain and tariff risk. We are pleased with our progress on the manufacturing front and expect to qualify the first production lines in the first half of 2026. We have been particularly encouraged by our ability to identify and onboard new sales talent. We are ahead of schedule in our goal of doubling the size of our sales force by the end of 2026.
The rest of the Stoker's segment portfolio also performed better than expected in the quarter. Overall, Stoker's revenue increased 81% to about $74.8 million, reflecting a 4% increase in looseleaf, a 6% increase in MST and the aforementioned 628% increase in Modern Oral revenue. During the third quarter, Zig-Zag revenue was down 11% to $44.2 million and down 6% sequentially. While this decline was anticipated and performance was ahead of our expectations, we continue to think it reflects some opportunity costs related to our focus on Modern Oral.
With that, I'll hand the call over to Summer to walk through the progress of our key go-to-market initiatives.
Thank you, Graham. As he noted, we continue to make significant investments to support our go-to-market strategies to prioritize FRE, while also continuing to generate strong cash flow from our legacy brands. Throughout the quarter, we continued to expand our efforts and our initiatives to support the growth of FRE focused on sales and marketing. Our key initiatives to support FRE include: first, optimizing our approach to expand distribution, improve brand merchandising and minimize out of stocks. To support our growing sales organization and increase store footprint, we have developed new sales and merchandising tools to secure the ideal assortment, establish shelf space and execute a premium look and feel at retail.
Throughout the quarter, we also continued our expansion efforts not only into new stores within large-scale chains, but also expanded our SKU offerings. Toward the end of the quarter, we launched FRE Watermelon. Fruit flavors represent about 1/4 of all OSB sales when excluding mint and wintergreen flavors. Watermelon is not merely a flavor extension, it is the fastest-growing fruit flavor in the nicotine pouch category, and FRE is uniquely positioned as a first mover with a complete strength offering.
Second, continuing to invest in and expand strategic marketing campaigns to accelerate brand awareness and consumer loyalty. We have been encouraged by engagement and early returns from our partnership with Professional Bull Riders and are exploring other brand partnerships and collaborations that align with FRE's Own Your Edge tagline and brand ethos.
With regards to Zig-Zag, we continue to execute marketing and sales initiatives that build upon our 145-year legacy and solidify our premium position across the segment. To build upon this legacy and reward our most loyal consumers while creating an opportunity for viral buzz, we launched a promotion called Zig-Zag for Life. This campaign offers an opportunity to win a lifetime supply of Zig-Zag cones to anyone who has or gets a Zig-Zag tattoo. We also relaunched Zig-Zag Studio, a collaboration with creators and musicians to build upon the brand's strong association with pop culture. These campaigns magnify Zig-Zag's identity as an iconic brand and consumer interest has been encouraging. Of note, in the quarter, we also laid the groundwork for the launch of a new Zig-Zag product, Natural Leaf Flat Wraps to better compete in the ever-growing Natural Leaf segment of the wraps category.
Lastly, turning briefly to Stoker's. We continue to see strong performance despite category pressure. In the quarter, we launched both a new product offering, Stoker's Fine Cut Wintergreen cans and Stoker's first-ever D2C site. Stoker's continues to be a steady heritage business with a very active and engaged consumer base.
In closing, we continue to build our brands for the long term, execute against our omnichannel plan and win new consumers. Our focus is to prioritize strategic investments to maximize the value of our world-class brands and further strengthen our distribution capabilities.
Let me now turn the call back over to Andrew to go through our financial results.
Thank you, Summer. Sales were up 31% year-over-year to $119 million for the quarter. For the quarter, gross margin was 59.2%, which was up 360 basis points year-over-year and 210 basis points sequentially. The change in margin is mix driven, primarily related to our outsized growth in Modern Oral. Reported SG&A was $44.5 million for the quarter, which was up $4.2 million sequentially. This increase was primarily driven by Modern Oral related sales and marketing investments as well as increased outbound freight charges to support our growing business. Adjusted EBITDA was up 17% year-over-year to $31.3 million for the quarter at a 26.3% margin.
Going into segment performance. Zig-Zag sales decreased 11% year-over-year to $44.2 million for the quarter, but was ahead of our expectations. Gross margins increased 210 basis points to 57.5%, driven by mix shift and improved COGS pricing in certain Zig-Zag product categories. Stoker's net sales increased 81% year-over-year to almost $75 million for the quarter. MST sales increased 6% year-over-year to $27 million for the quarter. Share in-store selling was up 130 basis points year-over-year to 12.1%. Loose leaf sales increased 4% year-over-year to $11 million. Our Modern Oral nicotine pouch sales, FRE and ALP, were up 628% year-over-year, achieving total revenue of $36.7 million. White pouch now accounts for 31% of our business, up from 26% in the second quarter and 6% a year ago.
Moving to the balance sheet. We ended the quarter with just over $201 million of cash. Free cash flow for the third quarter was negative $1 million, including the first coupon payment on our 7.625% high-yield bond issued in February of 2025. As Graham mentioned, during the quarter, we raised $100 million of gross proceeds and $97.5 million of net proceeds at an average price of $98.59 per share under our previously announced ATM program to support our white pouch growth initiatives. CapEx for the quarter was $3.8 million.
On to guidance and other items. As previously noted, we are increasing our full year 2025 adjusted EBITDA guidance to $115 million to $120 million from $110 million to $114 million and also increasing our anticipated total Modern Oral sales range to $125 million to $130 million from the previous range of $100 million to $110 million. This guidance reflects increased investment in our go-to-market plan as well as tariff and currency-related impacts. For modeling purposes, the effective income tax range is 23% to 26% on a go-forward basis. Budgeted CapEx for 2025 is $4 million to $5 million, exclusive of projects related to our Modern Oral business. We expect to spend between $3 million to $5 million for the full year to supplement our Modern Oral PMTAs.
Now let me turn it back over to Graham.
To conclude, we are pleased with our third quarter results, and I'll now turn it over to questions.
[Operator Instructions] The first question comes from Eric Des Lauriers from Craig-Hallum.
2. Question Answer
Congrats on yet another fantastic quarter here. First question for me, just on the onshoring, nice to see. How should we think about this from a capacity standpoint? And how are you thinking about sort of COGS per unit for nicotine pouches produced onshore versus via your co-manufacturing partner right now?
Eric, thanks for the question. So the way we're thinking about the unit economics for our white pouch is with onshoring, we'll have sort of immediate savings in terms of inbound freight as well as avoidance around tariff. So we should have favorability on those two items out of the gates once we actually qualify the lines, which we're expecting in the first half of 2026. And then on an ongoing basis, as we get volume on those lines, we expect the unit economics to improve from there.
Okay. Great. That's very encouraging. And then just any commentary on that capacity standpoint, how we should think about this?
Yes. Look, I think that as we've disclosed in the past, we feel good about the capacity that we've got with our third-party manufacturer. And the capacity that we get in the U.S. will be additive to that. So we believe that we're in a very good position, both from an inventory perspective that we have on hand today as well as capacity on a go-forward basis.
All right. That's encouraging. And then just as a kind of follow-up here, could you comment on what you're seeing from an in-store market share perspective for your Modern Oral category here? Just any -- I know it's still very early and you're still rolling out, but any comments on early kind of in-store market share would be helpful.
Yes. Look, it's -- we certainly haven't disclosed that publicly, but it's really sort of bifurcated at this point. Obviously, you have sort of a national perspective on where our market share sits from a national standpoint. As we grow our distribution base, we're really focused on share in-store selling. And I'll tell you, we're highly encouraged by those results.
The next question comes from Ian Zaffino from Oppenheimer.
Really good quarter. Question would be, can you maybe talk about the MST and looseleaf growth there? What was driving that as far as price, volume and kind of market share, if you could talk about that?
Yes. I would say that it's a combination of a couple of those things. We grew share sequentially in the quarter as well as there was some favorability around pricing. I would note that we anticipate that there's going to be north of 900 million cans sold in that category. We still have less than 10% share, although it's high single-digit share. We think there's tremendous opportunity for further gains within MST. So we remain excited about the opportunity.
Okay. And then on Modern Oral, can you just maybe help us understand the drivers there, FRE versus ALP? Maybe you could talk about each one and what you're seeing there. And then as you kind of continue to push into larger chains, what kind of cadence should we expect as those start to hit and as your discussions have been ongoing?
Sure. I'll take the first part of that question. To this point, we haven't disclosed the differentiation between FRE and ALP given the sensitivity around the partnership. What I can say is we saw healthy growth from both properties during the quarter. So we were excited about that. Our ALP business continues to dominate from a B2C standpoint, but they are also making some inroads into some bricks-and-mortar accounts. We're highly encouraged by the results of some of those early tests in there. FRE had a very nice quarter, both online as well as in bricks and mortar.
I'll pass it over to Summer to answer the second part of the question there for you, Ian.
We continue to make progress in both new chains and expanding our SKU assortment in existing chains. So we remain really excited and encouraged about our progress there. And in particular, with some of the partners we've had for a while, both sides continue to be happy with the partnership, and we're excited to see how it evolves in coming quarters. And as we look toward progressing in upcoming quarters, major chains are in the process of evaluating their planograms for next year, and we're in those conversations, same as our competitors. So we look forward to how the next few quarters roll out.
Okay. And then if I could just ask one more here. As far as in Modern Oral, the promotions, how did you handle the promotions that we saw a couple of months ago? And how do you kind of navigate the landscape given that? Or what's kind of, I guess, your overall view of how the category is going to kind of play out over -- the competitive landscape is going to play out over the next, call it, quarter or 2 quarters or so?
Sure. Look, I remain bullish on the category. And one of those sort of foundational components about that bullishness is around the balance sheets that the large manufacturers have to deploy against converting consumers into the category. We believe we have a winning format as well as two winning brands that give us an opportunity to really chase after consumers. Obviously, Q3 was a brutal promotional quarter, but not for us. We sort of maintained the integrity of our pricing at retail. We continue to focus on the things that we know win for our brands, which is getting more shelf space, getting broader presence in the store. So we really did participate within the quarter as we saw the major competitors sort of deploy their promotional resources in the market.
And look, we think long term, there's going to be strategic opportunities for us to invest in opening up the funnel for the consumer, but we're taking a really measured approach and really reading our data and listening to what consumers are telling us within our online platforms, which gives us somewhat of a distinct advantage when we have that really direct touch point with our consumer. So we'll be opportunistic in terms of the way we think about deploying our promotional dollars from a retail standpoint. But more importantly, we're really focused on getting our platform right in the store because we see when we do that, that we have a really great opportunity to win consumers.
The next question comes from Aaron Grey from Alliance Global Partners.
This is John on for Aaron Grey. Congrats on the strong quarter. So I know in the prepared remarks, you touched on the go-to-market strategy progress. But in terms of distribution, do you still see meaningful white space opportunities for FRE more so near term? And for ALP, when should we expect to see meaningful brick-and-mortar distribution? Were some of the initial brick-and-mortar channel pilots to see how ALP and FRE performed? Just any more color on what you think may be the right approach to promote the brands alongside each other would be helpful.
Yes. Look, we're excited about the continued gains that we make. We've mentioned in past quarters and as well as on this call that we continue to invest in our sales infrastructure to further our distribution gains in the market. Some are just noted a second ago, we're pleased with our progress against the chain accounts, both large and small chains. We do have an account that shares both platforms, both FRE and ALP. We've been excited about the results of sort of that shared platform inside the store. There's a tremendous amount of white space for both brands, albeit a little bit more for ALP at this point in time, given the fact that we've been focused on bricks-and-mortar distribution out of the gate, and ALP has been focused on direct-to-consumer.
So I think there's a really great marriage there as we move forward with tremendous opportunities for both brands to effectuate a broad-based distribution and really screen to multiple consumer audiences to give us the greatest upside to capture consumers into either one of the franchises.
Great. And second, how would it be best to think about the approach to balancing profitability and growth? 4Q embeds a little bit of EBITDA margin pressure and the company has been able to achieve sizable growth while maintaining a healthy EBITDA margin of 26% year-to-date in 2025. Do you expect you'll be able to maintain that? Or could there be some EBITDA margin pressure even beyond 4Q as you invest in the promotional pouch environment?
Yes. Look, we're not certainly going to comment on our investment strategy specifically for competitive reasons. I would say that at this point in time, we've struck a sort of a healthy balance between growth and profitability. And so I think that we'll be measured in the future in terms of how we deploy our resources around high-return projects.
The next question comes from Nick Anderson from ROTH Capital Partners.
Congrats on the quarter. First one for me, just on Modern Oral. Given the growth in the category, have you seen any noticeable changes in shelf space allocation by retailers? I know someone mentioned the planogram phase going on now, but how do you expect that allocation of space to trend kind of going forward? And if Modern Oral products are gaining allocation, which products are losing allocation?
Yes. I'll take that question, and Graham can chime in as well. What we're hearing from retailers that they're really taking a methodical approach to how they do allocate space across their shelf and their back bar area, because they see the category dynamics shifting more to OST. And so they're being really diligent and deliberate about how they're allocating that space across the segments in the nicotine space and then being really thoughtful about which brands they're putting on shelf as well based on performance. And so we're happy to be part of those conversations.
Yes. Look, I think we anticipate that the allocation of space for Modern Oral will grow given the underlying growth of the category. And I think it's really -- it's too difficult a question to answer specifically on which products will be displaced on the shelf because there's a lot of regional preferences around different types of products that sell nationally. So I think it's a little hard to say what could be displaced in that process. But from our standpoint, we think opening up more shelf space is just -- is a big tailwind for our business.
Great. I appreciate that color. Second for me, just on the loyalty initiatives. You have ALP and FRE rewards programs online. Just wanted to get some color on how those are trending in terms of program growth and engagement, and if there's any noticeable difference in spend from these consumers in those loyalty ecosystems.
Yes. Look, I think having rewards programs on any D2C site is a smart strategy for a D2C brand because you're able to engage with those consumers that are loyal and coming back to purchase and engage with your brands. And those are really the customers that we highly value. And so as we continue to grow that program, we'll continue to evolve and engage with those consumers, and they're certainly the most valuable to us. And that first-party data and being able to understand their preferences is something that we're really focused on.
Yes. And look, I'd like to add to that as well, both FRE and ALP, I think where we're particularly excited is the engagement with our subscription sign-ups on both platforms. While we haven't specifically pointed out what that growth is, we're very encouraged with the consumer adoption around our subscription service.
The last question comes from Gerald Pascarelli from Needham.
Just on Modern Oral. Obviously, it's another very strong quarter, another very strong guidance raise here. But the guidance does imply that the trends that the revenue will slow, I think, to like mid-single-digit growth sequentially if you use the midpoint of the updated guidance here. So if you could maybe just talk about some of the dynamics. Was there a potential pull forward in revenue in 3Q? Or is it fair to assume that there may be a certain degree of conservatism embedded in the new outlook just given some of the category dynamics? So any color there would be helpful.
Yes. Gerald, great question. Thank you for asking. Look, I think the -- while we're excited about sort of the guidance increase, I think the area that we would point out is as we go out and we get on shelf and we negotiate those deals to get on shelf, that comes at the expense of contra revenue. And so I think in the out quarters, what you could expect from us is really to talk a little bit of the differential between our gross sales and net sales because of that dynamic of contra revenue. But that's really the area that speaks to your question.
Got it. My next one is on gross margin for Stoker's specifically. Historically, a segment with gross margin that ranged in the high 50s or in the mid-50s to the high 50s. And over the past 2 quarters, now you're above 60%, which comes seemingly with negative mix shift from higher revenue growth in your Modern Oral portfolio. So if you could just help us bridge what's driving this really strong margin? Have the margin profiles on both FRE and ALP come up maybe relative to where they were a few months ago as you continue to scale the brand? And I guess just like a long-winded way of asking like what's driving the 60% plus margin in Stoker's?
Yes. Thanks for the question. So what's driving the higher margins in the segment is really mix. And what we're seeing is that we have a higher D2C in the Modern Oral part of that business. I think the thing that's important to keep in mind is that our freight expense is actually in SG&A and not in cost of goods. And so when you look at it, when you include the SG&A portion of that freight that's attributable, you will see some compression on the margins at the EBITDA line. But that's part of the driver.
The other part of the driver is tariffs on a go-forward basis, we would expect to have more of an impact on tariffs. So as I think about the short term over the next couple of quarters, I would expect to see those margins come down just a bit due to margins, but also we'll still have a higher mix of D2C, which should elevate. But I'd expect net-net for those margins to come down just a bit.
Perfect. And then if I could just squeeze one more in. Just going back to some of the promo commentary. Graham, if you could just maybe provide I don't know, your near-term outlook on the category, what you expect from the promotional environment and whether or not you expect it to maybe become a little more rational in 2026 than it is currently? I would just love your thoughts there.
Yes. I appreciate the question. Look, you've got three well-run, well-financed companies with incredibly strong balance sheets. And they really -- this category sort of is an area that they have to win in, right? And so I think that with that as the backdrop, as they all fight for the consumer, I would anticipate that the promotional environment would be -- would remain healthy, driven by the large competitors in the category. And from our standpoint, we're really focused in on building brand, building the connection with the consumer, both with our FRE and ALP properties and being really mindful of how we spend against the funnel and opening up for consumers. We certainly don't have the same types of resources that the large companies do, but we believe that we're -- our balance sheet for our size is it puts us in a really good position to sort of strike in the areas that make sense for our brands.
And so we're excited about the promotional activity from the standpoint of the growth of the category. This is the way the category gets to $10 billion or north by the end of the decade is by the conversion of cigarette consumers into Modern Oral, and there's no better companies to do that than the folks that own those cigarette brands. So I remain bullish on the category. I'm particularly bullish on the large manufacturers converting consumers into Modern Oral. And I'm particularly excited about our brands and the properties of our brands relative to the variety of nicotine strengths, the flavors as well as the mouth feel. I think that when we have a consumer that tries our product, we have a really good shot at converting that consumer.
And so I don't anticipate that the landscape will lighten up anytime soon from a promotional standpoint. It's been going on for over a year now. There has been some large company in the space that has been on promotion at some point in time for well over a year now. And so I don't think it's going to change anytime soon from that standpoint. But we're just bullish and excited about our opportunity to win consumers because of our brand as well as the features and benefits of the product.
That concludes our Q&A session. I will now turn the call over to Graham Purdy for closing remarks.
Thank you so much, everybody, for joining the call this quarter. Certainly really excited about our Q3 results and really excited to talk to you as we bend around to 2026. So thank you so much for taking the time, and we'll talk to you all in a few months.
Ladies and gentlemen, that concludes today's call. Thank you all for joining, and you may now disconnect.
Financial data from Turning Point Brands Inc
Revenue
Revenue is the sum of all sales generated by a company, e.g. for its products or services.
Revenue (TTM) metric explainedDirect Costs
Direct costs are the costs incurred directly in connection with the manufacture of the product or service.
Gross Profit
Gross Profit indicates how much of the revenue remains in the company after deducting direct production costs. If the percentage share of sales is calculated, this is referred to as the gross margin.
Gross Profit metric explainedSelling and Administrative Expenses
Selling, general and administrative expenses (SG&A) include all expenses for marketing and sales as well as the general administration of the company.
Research and Development Expense
Research and development costs (R&D) provide information on how much the company invests in the research and development of its products. The costs are particularly interesting as a percentage of revenue and in comparison to direct competitors.
EBITDA
EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) is the company's earnings before interest, taxes, depreciation and amortization. The EBITDA margin is calculated as a percentage of sales.
Depreciation and Amortization
Depreciation represents reductions in the value of the company's assets (e.g. due to wear and tear on machinery).
EBIT (Operating Income)
EBIT (Earnings Before Interest and Taxes) is the company's profit before interest and taxes, also known as the operating income. The EBIT Margin is calculated as a percentage of sales at
.
Net Profit
Net Profit represents the profit or loss after deduction of all costs.
Net Profit metric explainedStocksGuide Premium
| Jun '26 |
+/-
%
|
||
| Revenue | 507 507 |
34%
34%
100%
|
|
| - Direct Costs | 208 208 |
33%
33%
41%
|
|
| Gross Profit | 300 300 |
35%
35%
59%
|
|
| - Selling and Administrative Expenses | 216 216 |
76%
76%
43%
|
|
| - Research and Development Expense | - - |
-
-
|
|
| EBITDA | 91 91 |
13%
13%
18%
|
|
| - Depreciation and Amortization | 8.35 8.35 |
47%
47%
2%
|
|
| EBIT (Operating Income) EBIT | 83 83 |
16%
16%
16%
|
|
| Net Profit | 45 45 |
2%
2%
9%
|
|
In millions USD.
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Turning Point Brands Inc Stock News
Company Profile
Turning Point Brands, Inc. provides tobacco products. It operates through following segments: Smokeless products, Smoking products and NewGen products. The Smokeless products segment manufactures and markets moist snuff and contracts for and markets chewing tobacco products. The Smoking products segment imports and markets cigarette papers, tubes, finished cigars, NYO cigar tobaccos and cigar wraps and processes, packages and markets pipe tobaccos. The NewGen products segment markets e-cigarettes, e-liquids, vaporizers, and other related products and distributes a wide assortment of vaping products to non-traditional retail outlets via VaporBeast and Vapor Shark. The company was founded by Thomas Helms, Jr. in 1988 and is headquartered in Louisville, KY.
StocksGuide Premium
| Head office | United States |
| CEO | Mr. Purdy |
| Employees | 484 |
| Founded | 1988 |
| Website | www.turningpointbrands.com |


