Turning Point Brands Q4 Earnings Call Highlights

Turning Point Brands (NYSE:TPB) executives struck an upbeat tone on the company’s fourth-quarter 2025 earnings call, pointing to rapid growth in its Modern Oral nicotine pouch business and increased investment plans heading into 2026. Management said the company finished 2025 with momentum, led by strong performance from its FRÄ’ and ALP white nicotine pouch brands, while continuing to generate cash flow from legacy products.

Fourth-quarter results driven by Modern Oral growth

For the fourth quarter, Turning Point Brands reported consolidated revenue of $121 million, up 29% year-over-year. Adjusted EBITDA increased 14% to $30 million, representing a 24.8% margin, according to Chief Financial Officer Andrew Flynn.

Flynn said gross margin was 55.9% for the quarter, flat versus the prior year. Reported SG&A totaled $47.7 million, up $3.1 million sequentially, driven by planned Modern Oral sales and marketing spending and higher outbound freight charges.

Modern Oral: accelerating sales and increased 2026 guidance

CEO Graham Purdy highlighted the company’s white nicotine pouch momentum as the key driver of results. In the quarter, Modern Oral net revenue totaled $41.3 million. Management said net white pouch sales increased 266% year-over-year, while gross sales increased 337%.

Turning Point Brands initiated 2026 guidance for its Modern Oral business, calling for:

• Modern Oral gross revenue: $220 million to $240 million
• Modern Oral net revenue: $180 million to $190 million

Purdy emphasized the company’s intent to invest behind its white pouch brands and noted that under GAAP, a portion of the spending could be reflected as contra revenue. Management said it views the distinction between gross and net reporting as important for tracking progress as it “front-loads” investment to build repeat purchasing behavior over time.

For near-term profitability expectations, the company guided to first-quarter 2026 consolidated Adjusted EBITDA of $24 million to $27 million. Purdy said Turning Point Brands is working on multiple sales and marketing initiatives for white pouch that make it difficult to project EBITDA beyond the first quarter.

Distribution expansion and go-to-market priorities

Management repeatedly pointed to distribution gains and broader go-to-market investments as central to its 2026 strategy. Purdy said Turning Point Brands continues to expand FRÄ’ distribution into larger regional and national convenience store chains, while ALP—previously expected to remain direct-to-consumer through 2025—has begun appearing in brick-and-mortar retailer tests.

Purdy said Turning Point Brands expects to “significantly expand” brick-and-mortar distribution of ALP during the second quarter of 2026. In response to analyst questions, management suggested ALP’s store count ramp could resemble the early phase of the FRÄ’ launch, with a focus on rounding out the portfolio in retail locations where FRÄ’ already has distribution.

Chief Strategy Officer Summer said Turning Point Brands’ efforts for FRÄ’ have been focused on expanding distribution, improving merchandising, and maintaining adequate inventory. She also pointed to the use of new sales and merchandising tools that management said are helping secure assortments, establish shelf space, and execute a “premium look and feel” at retail. Summer also referenced brand-building efforts, including a recent activation at a sold-out Professional Bull Riders event at Madison Square Garden.

Purdy described a view that the nicotine pouch market may ultimately consolidate around five to six widely distributed brands and cited a belief that the category could approach or exceed $10 billion in manufacturer revenue by the end of the decade, based on varying analyst expectations. He said Turning Point Brands’ growth trajectory supports its long-term target of achieving double-digit market share, while later adding that the combined strength of FRÄ’ and ALP could position the company as a “strong challenger brand,” potentially targeting a number four market position with some upside.

Segment performance: Stoker’s strength, Zig-Zag decline as expected

On a segment basis, Turning Point Brands reported a mixed quarter. The Stoker’s segment delivered significant growth, while Zig-Zag declined, which management said was anticipated as resources were reallocated toward Modern Oral.

• Zig-Zag segment net sales: $40 million, down 13% year-over-year; gross margin of 54.6%, up 40 basis points
• Stoker’s segment net sales: $81 million, up 70% year-over-year, representing 67% of consolidated net sales

Within the Stoker’s segment, legacy Stoker’s brands increased 9% to $39.7 million, which Flynn said was driven by continued share growth in MSD, partially offset by expected declines in loose leaf. Modern Oral nicotine pouch net sales were up 266% year-over-year. Management noted that white pouch revenue represented 34% of consolidated net sales in the quarter, up from 12% a year earlier.

Summer also discussed several brand initiatives outside Modern Oral, including continued rollout of Zig-Zag Natural Leaf Flat Wraps and efforts to support trial through regional programs and sampling tied to major sporting weekends. She said Stoker’s launched a new flanker brand, Stoker’s Proud, designed to appeal to value-seeking consumers while insulating the broader brand from category pricing pressure.

In Q&A, management addressed Stoker’s segment gross margin pressure, noting an elevated tariff rate in the fourth quarter that impacted Stoker’s margins due to white pouch products. The company said there was an add-back in Adjusted EBITDA, but not in gross margins.

Cash, capital spending, and manufacturing plans

Turning Point Brands ended the quarter with $222.8 million in cash and reported fourth-quarter free cash flow of $19.2 million. Capital expenditures were $3.3 million for the quarter.

For 2026, the company budgeted CapEx of $4 million to $5 million, excluding projects related to Modern Oral. It also expects to spend $3 million to $5 million during the year to supplement its Modern Oral PMTA submissions. For modeling purposes, management said it expects an effective income tax rate range of 23% to 26% on a go-forward basis.

On manufacturing, management said it expects to qualify the first production lines at its new Louisville factory over the coming months. In response to questions, the company said it will continue using its Indian partner as both FRÄ’ and ALP grow, with U.S. production supplementing demand. Management also said it expects no supply chain constraints across the two locations and anticipates “green shoots” in margin enhancements toward the end of the year as domestic inventory flows through the P&L. Flynn also pointed to inbound freight optimization as an area of opportunity the company is pursuing.

In closing remarks, Purdy said Turning Point Brands was pleased with year-end results and “excited” about opportunities in 2026, with planned investments aimed at accelerating white pouch growth while maintaining cash flow from heritage brands.

About Turning Point Brands (NYSE:TPB)

Turning Point Brands, Inc (NYSE: TPB) is a U.S.-based consumer products company focused on the manufacture, marketing and distribution of smokeless tobacco, vaping and cigar products. Headquartered in Old Hickory, Tennessee, the company serves retail outlets across all 50 states through a direct-store-delivery network and select third-party distributors. Turning Point Brands operates two reporting segments—Smokeless Products and Cigar—and leverages its logistics capabilities to offer a broad portfolio of brands and SKUs.

In its Smokeless Products segment, Turning Point Brands produces moist smokeless tobacco under leading brand names such as Grizzly, Kodiak and Stoker’s.