Turning Point Brands, Inc.

What they do

TPB manufactures, markets and distributes alternative smoking accessories and other tobacco products to adult consumers, primarily through the Zig-Zag and Stoker's segments. Products include rolling papers, tubes, MYO cigar wraps, cigars, moist snuff, and modern oral nicotine pouches such as FRE and ALP. It ships through roughly 900 distributors plus about 600 secondary wholesalers and reaches approximately 220,000 retail locations in North America.

Revenue drivers

• Stoker's Products — Includes moist snuff and the fast-growing Modern Oral brands FRE and ALP; at 75% of Q2 2026 net sales and $107.6 million in the quarter, it is now the larger segment.
• Modern Oral (within Stoker's) — Nicotine pouch business generated Q2 2026 gross revenue of $87.0 million and net sales of $68.4 million, which was 48% of total company net sales, up from 26% a year earlier.
• Zig-Zag Products — Rolling papers, tubes, MYO cigar wraps, cigars and accessories; at 25% of Q2 2026 net sales, it is the smaller segment, with Zig-Zag described as the #1 overall U.S. rolling paper at roughly 33% market share.

Recent performance

Second quarter 2026 consolidated net sales rose 22.6% to $142.9 million, with Stoker's segment net sales up 54.5% to $107.6 million and Zig-Zag segment net sales down 24.8%. Modern Oral gross revenue increased 149% to $87.0 million and net sales increased 128% to $68.4 million, representing 48% of total company net sales. Gross profit rose 40.6% to $93.7 million, including a tariff refund; adjusting for the out-of-period COGS impact, gross profit was $81.5 million. Net income fell 75.2% to $3.6 million and Adjusted EBITDA fell 50.0% to $15.2 million, as SG&A rose 91.1% to $76.9 million on Modern Oral sales and marketing investment. Diluted EPS was $0.18 and Adjusted Diluted EPS was $0.23, versus $0.79 and $0.98 a year ago.

Strategy

Management is prioritizing Modern Oral growth, with FRE and ALP supported by investment in retail distribution, commercial capabilities and brand development. The company is spending heavily on sales and marketing and trade promotions, which compressed Q2 2026 profitability. Guidance for full-year 2026 Modern Oral gross sales was raised to $330–$350 million from $280–$300 million, and net sales to $260–$270 million from $210–$225 million. The company also raised about $59.6 million of equity in Q2 2026 to support long-term strategic objectives.

Risks

• Declining tobacco sales — TPB cites declining sales of tobacco products and the expected continued decline of the tobacco industry overall as a risk to the business.
• Supplier and producer dependence — The company depends on a small number of third-party suppliers and producers and may be unable to replace them in the event of a supply or product disruption.
• FDA regulation — TPB faces substantial and increasing regulation, changes in FDA enforcement priorities, and potential regulation or marketing denials of its products by the FDA.
• Illicit competition — The company cites competition from illicit sources and damage caused by illicit products to its brand equity, alongside intense competition generally.

Outlook

Management raised full-year 2026 Modern Oral gross sales guidance to $330–$350 million and net sales guidance to $260–$270 million. It projects full-year 2026 Adjusted EBITDA of $70–$90 million, including continued investment in Modern Oral sales, marketing and trade promotions. The company highlighted a continued consumer shift toward modern oral nicotine as the basis for its growth plans.