08-05-2025
Turning Point Brands Inc (TPB) Q1 2025 Earnings Call Highlights: Strong Revenue Growth and ...
Revenue: Increased 28% to $106.4 million for the quarter.
Adjusted EBITDA: Increased 12% to $27.7 million, with a 26% margin.
Gross Margin: 56%, down 220 basis points year over year.
SG&A Expenses: $36.4 million for the quarter, up $1.8 million sequentially.
Modern Oral Revenue: $22.3 million for the quarter.
Stoker's Revenue: Increased 63% to $59.2 million.
Zig-Zag Revenue: Increased 1% to $47.3 million.
Cash Position: Ended the quarter with $99.6 million in cash.
Free Cash Flow: $12.4 million for the quarter.
CapEx: $2.2 million for the quarter.
Nicotine Pouch Sales Guidance: Increased to $80 million to $95 million for the full year.
Adjusted EBITDA Guidance: Reaffirmed at $108 million to $113 million for 2025.
Release Date: May 07, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
Revenue increased by 28% to $106.4 million, surpassing expectations.
Adjusted EBITDA rose by 12% to $27.7 million, reaffirming strong financial performance.
Significant growth in the white nicotine pouch segment, with sales increasing nearly tenfold year over year.
Increased full-year guidance for nicotine pouch sales to a range of $80 million to $95 million.
Stoker's segment revenue increased by 63%, driven by growth in loose leaf and MST sales.
Negative Points
Gross margin decreased by 220 basis points year over year, indicating potential cost pressures.
Reported SG&A expenses increased by $1.8 million sequentially, impacting profitability.
Potential headwinds from tariffs, with an anticipated $5 million to $7 million impact on imported products.
FX headwinds in the Zig-Zag segment due to a stronger Euro, affecting financial performance.
Challenges in the Zig-Zag segment with only a 1% sales increase, impacted by the unwind of the Clipper relationship.
Q & A Highlights
Q: Can you comment on the distribution gains in modern oral in the quarter and expectations for rolling out ALP to brick-and-mortar stores? A: Summer Frein, Chief Revenue Officer: We are making great traction with retailers, including high-profile ones like 7-Eleven, and are in active conversations with other top chains. We have rollouts planned for later this year. Graham Purdy, CEO: The ALP plan is different from the free plan, focusing initially on online direct-to-consumer sales, but we anticipate seeing some brick-and-mortar presence by the end of the year.
Q: What is your capacity to produce nicotine pouches at your current domestic MST production facility, and are there plans for onshoring production? A: Andrew Flynn, CFO: Our current supply is adequate, and we are exploring onshoring options to enhance production capabilities.
