Turning Point Brands Q2 Earnings Call Highlights

Second-quarter sales rose 23% to $143 million , driven by Modern Oral, but adjusted EBITDA fell 50% to $15 million as Turning Point increased sales, marketing and retail investments and faced Zig-Zag weakness.

Modern Oral net sales surged 128% year over year to $68 million, accounting for 48% of company revenue.

The company raised its 2026 Modern Oral gross-sales forecast to $330 million-$350 million and net-sales outlook to $260 million-$270 million.

Turning Point plans to expand retail distribution and its sales force, begin U.S. manufacturing by year-end pending regulatory approval, and maintained full-year adjusted EBITDA guidance of $70 million-$90 million despite continued nicotine-pouch investment.

Turning Point Brands NYSE: TPB reported second-quarter 2026 sales growth led by its Modern Oral nicotine pouch business, while increased spending on sales, marketing and retail execution weighed on adjusted EBITDA. Consolidated net sales rose 23% from a year earlier to $143 million.

Chief Financial Officer Andrew Flynn said reported gross profit was $94 million, including a tariff refund that affected the quarter. Excluding the out-of-period cost-of-goods impact related to that refund, adjusted gross profit increased 22% year over year to $81 million, representing 57% of sales.

Adjusted EBITDA declined 50% from the prior-year period to $15 million, or an 11% margin. Flynn attributed the decline to higher sales and marketing investments, softness in Zig-Zag and the company’s strategy of investing behind nicotine pouch growth, partly offset by accelerated Modern Oral growth.

President and Chief Executive Officer Graham Purdy said Modern Oral gross sales increased 149% year over year and 26% sequentially, while net sales rose 128% from a year ago and 32% sequentially. The company attributed the gains to expanded retail distribution for its FRE and ALP brands, as well as direct-to-consumer sales. Modern Oral generated $68 million in net revenue during the quarter and $89 million in gross revenue. The business accounted for 48% of consolidated net sales, compared with 26% in the second quarter of 2025.

The Stoker’s segment, which includes Modern Oral and heritage tobacco products, posted net sales of $108 million, up 55% year over year and representing 75% of company sales. Heritage Stoker’s brand revenue declined 1% to $39 million, as share growth in moist smokeless tobacco was partly offset by expected declines in loose-leaf tobacco. Adjusted gross profit in the Stoker’s segment rose 41% to $61 million, though adjusted gross margin fell 600 basis points to 57%. Flynn said the lower margin reflected higher penetration in chain accounts.

Purdy said the company was encouraged by the early customer response to its Stoker’s Proud MST product, launched earlier this year. He described Stoker’s as the “only truly premium product for value-oriented consumers” in the segment.

The company said it expects its chain-store count to rise 70% year over year by the end of 2026. Purdy said shelf resets have begun at several large retail accounts and are expected to be fulfilled largely through the remainder of the year, though national-chain resets can require lengthy implementation periods.

Chief Revenue Officer Summer Frein said sales representatives are selling both ALP and FRE, with ALP currently focused primarily on independent retailers and, in some cases, regional chains. The company expects to bring ALP into discussions with larger chain retailers during the fall reset season and into the spring.