Company Overview - Turning Point Brands, Inc. operates in the tobacco and alternative products sector, leveraging established brands like Zig-Zag and Stoker's [5] - The company employs a multi-segment strategy, serving both traditional tobacco consumers and those seeking alternative products [5] - Turning Point Brands generates revenue through the manufacture, marketing, and distribution of various branded consumer products, including rolling papers, moist snuff tobacco, and vapor products [7] Financial Performance - As of November 14, 2025, Turning Point Brands had a market capitalization of $1.93 billion and revenue of $435.72 million for the trailing twelve months (TTM) [3] - The company reported a net income of $52.37 million for the TTM [3] - In Q3, sales increased by 31% year over year to $119 million, with net income rising 70% to $21 million, resulting in diluted earnings per share of $1.13 compared to $0.68 in the prior year [8] Growth Drivers - A significant contributor to Turning Point Brands' success has been its Modern Oral line of nicotine pouches, which saw Q3 sales surge by 628% year over year to $37 million [9] - The company has raised its 2025 sales forecast for the Modern Oral line to between $125 million and $130 million, a substantial increase from the original guidance of $60 million to $80 million [9] Market Performance - As of November 14, 2025, shares of Turning Point Brands were priced at $101.22, reflecting a 75% increase over the past year, outperforming the S&P 500 by 62 percentage points [2] - The stock reached a 52-week high of $110.55 on November 5, 2025, indicating strong market performance [10]

Core Insights - Turning Point Brands, Inc. (TPB) has garnered attention from investors, with a price target of $110 set by Aaron Grey, indicating a potential upside of approximately 8.74% from its current trading price of $101.16 as of November 5, 2025 [1] Financial Performance - TPB reported impressive earnings per share (EPS) of $1.05 for Q3 2025, significantly exceeding the Zacks Consensus Estimate of $0.81, marking a year-over-year increase from $0.68 and an earnings surprise of +29.63% [2][6] - The company's revenue for the same quarter was $118.98 million, surpassing the Zacks Consensus Estimate by 5.90% and showing a substantial increase from $105.62 million in the previous year [3][6] Stock Performance - TPB's stock experienced a price change of $5.98, reflecting a percentage increase of 6.28%, with trading prices fluctuating between a low of $94.50 and a high of $110.33 on the reporting day [4] - Over the past year, TPB's stock reached a high of $110.35 and a low of $47.53, with a current market capitalization of approximately $1.82 billion and a trading volume of 1,379,296 shares [4] Dividend Announcement - The Board of Directors declared a regular quarterly dividend of $0.075 per common share, payable on January 9, 2026, to shareholders recorded as of December 19, 2025, reflecting the company's commitment to returning value to shareholders [5]

Company Overview - Turning Point Brands, Inc. (NYSE:TPB) specializes in manufacturing, marketing, and distributing branded consumer products, operating through segments like Stoker's and Zig-Zag [1] Recent Rating Update - Oppenheimer upgraded TPB to "Outperform" with a stock price of approximately $98.74, indicating expectations for better performance than the overall market [2][6] Financial Performance - In Q3 2025, TPB reported a 31.2% increase in total consolidated net sales, reaching $119 million compared to the same period in 2024, driven primarily by the Stoker's segment which saw an 80.8% increase in net sales [3][6] - The Zig-Zag segment experienced a 10% decline in net sales, indicating mixed performance across product lines [3] Stock Performance - TPB's stock price is currently at $101.23, reflecting a 6.36% increase or $6.05, with fluctuations between a low of $94.50 and a high of $110.33 on the same day [4][6] - Over the past year, TPB's stock reached a high of $110.35 and a low of $47.53, demonstrating significant volatility [4] Market Capitalization and Trading Volume - TPB's market capitalization is approximately $1.82 billion, with a trading volume of 1,379,296 shares on the NYSE, indicating strong market presence and investor interest [5]

Sales Performance - For the three months ended September 30, 2025, total net sales increased by $28.3 million, or 31.2%, compared to the prior year period, primarily driven by the Stoker's products segment [144]. - Zig-Zag products segment net sales decreased by $5.2 million, or 10.5%, due to declines in U.S. papers and wraps, and the Clipper lighter business [145]. - Stoker's products segment net sales increased by $33.4 million, or 80.8%, with sales volume increasing by 69.0% and price/product mix contributing an additional 11.8% [146]. - For the nine months ended September 30, 2025, consolidated net sales increased by $75.1 million, or 28.1%, compared to the prior year period, primarily driven by the Stoker's products segment [165]. - Net sales in the Zig-Zag products segment decreased by $8.1 million, or 5.5%, due to declines in U.S. papers and wraps, and cigar products [166]. - Net sales in the Stoker's products segment increased by $83.1 million, or 69.0%, with sales volume up 62.9% and price/product mix contributing an additional 6.1% [167]. - Net sales for Q3 2025 reached $118.979 million, a 31% increase from $90.704 million in Q3 2024 [217]. - For the nine months ended September 30, 2025, net sales totaled $342.049 million, a 28% increase from $266.993 million in the same period of 2024 [217]. Profitability - Consolidated gross profit increased by $20.0 million, or 39.7%, with gross profit as a percentage of net sales rising to 59.2% [147]. - Consolidated gross profit increased by $47.5 million, or 31.9%, with gross profit as a percentage of net sales rising to 57.5% [168]. - Gross profit for Q3 2025 was $70.427 million, compared to $50.395 million in Q3 2024, reflecting a 39.8% increase [217]. - Operating income for Q3 2025 was $25.885 million, up from $20.805 million in Q3 2024, representing a 24.5% increase [217]. - Consolidated net income from continuing operations increased by $11.2 million, or 89.7%, reaching $23.8 million [143]. - Consolidated net income for Q3 2025 was $23.757 million, compared to $12.525 million in Q3 2024, marking an increase of 89.5% [217]. - Net income attributable to Turning Point Brands, Inc. for the nine months ended September 30, 2025, was $50.0 million, compared to $37.6 million in the prior year [184]. - For the three months ended September 30, 2025, net income attributable to Turning Point Brands, Inc. was $21.1 million, compared to $12.4 million for the same period in 2024, representing an increase of 70% [188]. Expenses - Selling, general, and administrative expenses increased by $15.0 million, or 50.5%, primarily due to increased shipping and selling costs related to modern oral sales [150]. - Selling, general, and administrative expenses increased by $33.4 million, or 38.0%, primarily due to increased shipping and selling costs related to modern oral sales [171]. - Consolidated operating income increased by $5.1 million, or 24.4%, but operating income as a percentage of net sales decreased to 21.8% [152]. - Consolidated operating income increased by $12.5 million, or 19.8%, but as a percentage of net sales decreased to 22.0% [174]. Cash Flow and Liquidity - Cash provided by operating activities for the nine months ended September 30, 2025, was $32.5 million, a decrease of $12.4 million compared to the prior year period [196]. - Net cash used in investing activities for the nine months ended September 30, 2025, was $28.4 million, an increase of $19.3 million compared to the prior year period, mainly due to the purchase of an option to acquire the Canadian distribution business for $8 million [197]. - Net cash provided by financing activities for the nine months ended September 30, 2025, was $148.3 million, an increase of $275.8 million compared to the prior year period, driven by proceeds from the ATM Program of $97.5 million [198]. - The company expects to have ample liquidity to satisfy its operating cash requirements for the foreseeable future due to strong cash balance and free cash flow generation [192]. - As of September 30, 2025, the company had $201.2 million in cash and $66.6 million available under the 2023 ABL Facility, with no borrowings outstanding [191]. Debt and Financing - As of September 30, 2025, the Company had $293.4 million in long-term debt, consisting of the newly issued 2032 Notes [202]. - The Company closed a private offering of $250.0 million aggregate principal amount of 5.625% senior secured notes due 2026, with interest payable semi-annually [206]. - The company entered into an ATM Program to increase the aggregate dollar amount of shares of common stock it may sell by an additional $200 million, with gross proceeds of $100 million from shares sold between August 15, 2025, and September 11, 2025 [193]. - The 2023 ABL Facility allows the Company to draw up to $75.0 million, with a $40.0 million accordion feature, secured by all assets of the ABL Borrower [209]. - The Company incurred debt issuance costs of $7.1 million related to the 2032 Notes, amortized over the expected life of the notes [205]. - The Company has not drawn any borrowings under the 2023 ABL Facility but incurred debt issuance costs of $2.6 million related to it [214]. - The 2032 Notes Indenture includes covenants that restrict the Company from incurring additional indebtedness and paying dividends under certain conditions [204]. Assets and Liabilities - Total current assets as of September 30, 2025, were $396.436 million, compared to $349.405 million as of September 30, 2024 [218]. - Total liabilities as of September 30, 2025, were $384.695 million, an increase from $365.923 million as of September 30, 2024 [218]. - Cash and cash equivalents as of September 30, 2025, amounted to $201.189 million, up from $167.917 million in the previous year [218]. - Total stockholders' equity as of September 30, 2025, was $358.153 million, compared to $314.413 million as of September 30, 2024 [218]. - Current liabilities totaled $44,820 million, with accounts payable at $11,675 million [219]. - Goodwill on the balance sheet was recorded at $135,932 million [219]. Market and Economic Conditions - Inflation has negatively impacted purchasing power, but the company has managed to implement price increases where feasible [221]. - No material changes in exposure to foreign currency, credit risk, or interest rate sensitivity reported for the nine months ended September 30, 2025 [222][223][224].

Core Insights - Turning Point Brands (TPB) reported quarterly earnings of $1.05 per share, exceeding the Zacks Consensus Estimate of $0.81 per share, and up from $0.68 per share a year ago, representing an earnings surprise of +29.63% [1] - The company achieved revenues of $118.98 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 5.90% and increasing from $105.62 million year-over-year [2] - Turning Point Brands shares have increased approximately 58.4% year-to-date, significantly outperforming the S&P 500's gain of 15.1% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.79 on revenues of $113.3 million, and for the current fiscal year, it is $3.50 on revenues of $448.65 million [7] - The estimate revisions trend for Turning Point Brands was mixed prior to the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The Tobacco industry, to which Turning Point Brands belongs, is currently ranked in the bottom 39% of over 250 Zacks industries, suggesting potential challenges ahead [8] - The performance of Turning Point Brands may be influenced by the overall industry outlook, as empirical research indicates a strong correlation between near-term stock movements and earnings estimate revisions [5]

Financial Data and Key Metrics Changes - Consolidated revenue increased by 31% to $119 million for Q3 2025, with adjusted EBITDA rising 17% to $31.3 million [7][17] - Gross margin improved to 59.2%, up 360 basis points year over year and 210 basis points sequentially [17] - Adjusted EBITDA guidance raised to a range of $115-$120 million, up from $110-$114 million [7][19] Business Line Data and Key Metrics Changes - Modern oral revenue, including Fre and On!, surged 628% year over year to $36.7 million [8][18] - Stoker's revenue increased by 81% to approximately $74.8 million, with MST sales up 6% and loose leaf sales up 4% [12][18] - Zig-Zag revenue decreased by 11% to $44.2 million, reflecting anticipated declines due to a focus on modern oral products [12][17] Market Data and Key Metrics Changes - White nicotine pouch brands now account for 31% of the business, up from 26% in Q2 and 6% a year ago [18] - Analysts expect the nicotine pouch category to approach or exceed $10 billion in manufacturers' revenue by the end of the decade [9] Company Strategy and Development Direction - The company is prioritizing investments in modern oral products while maintaining cash flow from heritage brands [10][11] - Key initiatives include reallocating sales and marketing resources, expanding international markets, and enhancing U.S. manufacturing capabilities [10][11] - The company aims to double the size of its sales force by the end of 2026 [11] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth potential in the nicotine pouch market and the company's long-term target of achieving double-digit market share [9] - The company is focused on maintaining a balance between growth and profitability, with expectations of continued promotional activity in the market [66] Other Important Information - The company raised $100 million in gross proceeds under its at-the-market offering program to support growth initiatives [10][19] - The company plans to update its buyback authorizations to provide for $200 million of capacity under each program [10] Q&A Session Summary Question: Capacity and COGS for onshoring - Management indicated that onshoring will lead to immediate savings in inbound freight and tariff avoidance, with expected improvements in unit economics as production ramps up [22][24][25] Question: In-store market share for modern oral category - Management noted that while specific market share data is not disclosed, they are encouraged by the results of in-store selling as distribution expands [26][27] Question: Growth drivers for MST and loose leaf - Growth in MST and loose leaf was attributed to a combination of increased market share and favorable pricing, with significant opportunities for further gains [31][32] Question: Modern oral growth drivers for Fre and On! - Both brands experienced healthy growth, with On! dominating B2C and making inroads into brick-and-mortar accounts, while Fre had a strong quarter in both online and physical retail [33][35] Question: Promotional environment outlook - Management remains bullish on the category, anticipating continued promotional activity driven by larger competitors, while focusing on building brand connections with consumers [66]

Financial Performance - Consolidated net sales for Q3 2025 increased by 31.2% year-over-year to $119.0 million[6] - Modern Oral sales reached $36.7 million, a 627.6% increase year-over-year, accounting for 30.8% of total net sales[6] - Stoker's segment net sales increased by 80.8% year-over-year to $74.8 million, with gross profit rising by 95.2% to $45.0 million[4][5] - Net income increased by 70.3% to $21.1 million, with diluted EPS rising to $1.13 compared to $0.68 in the same period last year[6][19] - Consolidated net income for the nine months ended September 30, 2025, was $56,508,000, an increase from $37,459,000 in 2024, representing a growth of 51.4%[23] - For the three months ended September 30, 2025, the net income was $30,229,000, compared to $6,472,000 for the same period in 2024, representing a significant increase[31] - Adjusted net income for the same period was $28,201,000, up from $5,925,000 in 2024, indicating a strong performance improvement[31] EBITDA and Profitability - Adjusted EBITDA for Q3 2025 was $31.3 million, up 17.2% from the prior year, with full-year guidance increased to $115.0 – 120.0 million[6][11] - Total gross profit increased by 39.7% to $70.4 million, with a gross margin of 59.0%[6][19] - Adjusted EBITDA for the three months ended September 30, 2025, was $31,345,000, compared to $26,755,000 in 2024, indicating a growth of 17.5%[29] - Adjusted operating income for Q3 2025 was $27,847,000, compared to $23,260,000 in Q3 2024, showing a year-over-year increase of about 20%[33] Cash Flow and Liquidity - Total liquidity as of September 30, 2025, was $267.8 million, consisting of $201.2 million in cash and $66.6 million available under a revolving credit facility[9] - Operating cash flows from continuing operations for the nine months ended September 30, 2025, were $32,515,000, down from $44,908,000 in 2024, a decrease of 27.5%[23] - Net cash provided by operating activities decreased to $32,515,000 in 2025 from $49,321,000 in 2024, reflecting a decline of 34%[23] - The company reported a net increase in cash of $152,381,000 for the nine months ended September 30, 2025, compared to a decrease of $87,270,000 in 2024[23] - Total cash at the end of the period increased to $203,101,000 in 2025 from $35,516,000 in 2024, marking a significant increase of 471.5%[23] - The company’s unrestricted cash at the end of the period rose to $201,189,000 in 2025 from $33,557,000 in 2024, an increase of 497.5%[23] Capital Expenditures and Investments - Capital expenditures for the nine months ended September 30, 2025, were $10,182,000, significantly higher than $3,516,000 in 2024, an increase of 189.5%[23] - The company raised $97.5 million in net proceeds under its "At the Market" offering program to accelerate growth in Modern Oral products[6] - The company incurred a loss on extinguishment of debt amounting to $1,235,000 in 2025, while there was no such loss reported in 2024[23] Segment Performance - Zig-Zag segment net sales decreased by 10.5% year-over-year to $44.2 million, but showed mid-single-digit growth sequentially excluding the Clipper business wind-down[7] Regulatory and Compliance Costs - The FDA PMTA-related costs were $482,000 in Q3 2025, down from $1,242,000 in Q3 2024, suggesting improved efficiency in regulatory compliance[33] Other Financial Metrics - The effective tax rate for Q3 2025 was 21.4%, compared to 27.1% in Q3 2024, which positively impacted net income[32] - The company reported a loss on discontinued operations of $165,000 in Q3 2025, compared to a loss of $16,000 in Q3 2024, indicating challenges in this segment[31] - Total adjustments to GAAP operating income included corporate restructuring costs of $233,000 in Q3 2025, reflecting ongoing strategic initiatives[33] - The company incurred $1,884,000 in stock-based compensation for Q3 2025, compared to $1,769,000 in Q3 2024, indicating ongoing investment in employee incentives[31]

Core Insights - Turning Point Brands, Inc. reported a total consolidated net sales increase of 31.2% to $119.0 million for Q3 2025 compared to Q3 2024 [1] - The Stoker's segment experienced a significant net sales increase of 80.8% [1] - Conversely, the Zig-Zag segment saw a decrease in net sales by 10% [1] Financial Performance - Total consolidated net sales for Q3 2025 reached $119.0 million, marking a substantial growth of 31.2% year-over-year [1] - The Stoker's segment's net sales growth of 80.8% indicates strong performance and demand within this category [1] - The decline of 10% in the Zig-Zag segment's net sales suggests potential challenges or shifts in consumer preferences affecting this product line [1]

Core Points - Turning Point Brands, Inc. (TPB) will host a conference call to discuss its Q3 2025 results on November 5, 2025, at 8:30 a.m. Eastern [1] - The company has declared a regular quarterly dividend of $0.075 per common share, payable on October 10, 2025, to shareholders of record on September 19, 2025 [5] Company Overview - Turning Point Brands, Inc. is a manufacturer, marketer, and distributor of branded consumer products, including alternative smoking accessories and consumables with active ingredients [2] - The company's product portfolio includes well-known brands such as Zig-Zag®, Stoker's®, FRE®, and ALP®, available in over 220,000 retail outlets across North America [2]

Industry Overview - The Zacks Tobacco industry is facing significant challenges, including declining cigarette sales due to shifting consumer preferences, inflationary pressures, and tightening regulations [1][4] - Rising health awareness and stricter restrictions on smoking are reducing demand for traditional tobacco products, negatively impacting overall industry performance [1][4] Key Trends - **Challenges in Cigarette Sales Volumes**: The industry is experiencing a decline in cigarette sales driven by inflation and changing consumer spending patterns, alongside regulatory restrictions on sales and advertising [4] - **Escalated Costs**: Industry participants are affected by cost inflation related to essential materials, energy, and labor, which poses risks to profit margins [5] - **Rising Popularity of Smoke-Free Options**: There is a growing demand for smoke-free alternatives like heated tobacco and vapor products, driven by health awareness and regulatory changes [6] Industry Performance - The Zacks Tobacco industry currently ranks 165, placing it in the bottom 32% of over 243 Zacks industries, indicating dull near-term prospects [7][8] - The industry's consensus estimate for current financial year earnings has decreased by 1.2% since August 2025, reflecting a negative earnings outlook [9] Market Comparison - Over the past year, the Zacks Tobacco industry has outperformed the S&P 500, gaining 36.4% compared to the S&P 500's growth of 18.4% [11] Valuation Metrics - The industry is currently trading at a forward 12-month price-to-earnings (P/E) ratio of 14.44X, lower than the S&P 500's 23.53X and the sector's 16.37X [14] Company Highlights - **Philip Morris International**: This company is transitioning towards a smoke-free future, focusing on reduced-risk products (RRPs) and has seen a 30% increase in shares over the past year [17][19] - **Altria Group**: Altria is prioritizing RRPs and has experienced a 31.7% surge in shares over the past year, supported by its strong legacy brands [22][23] - **Turning Point Brands**: This company has gained momentum with a 105.8% increase in shares over the past year, focusing on innovative product launches and expanding distribution channels [26][28]