Key Takeaways
- Turning Point Brands reported first-quarter 2026 total consolidated net sales of $124.3 million, up 16.8%.
- Modern Oral net sales increased 133% to $52.0 million, accounting for 42% of total company net sales.
- Stoker’s segment net sales rose 48.1% to $87.6 million, accounting for 70% of quarterly net sales.
- Zig-Zag segment net sales declined 22.4% to $36.7 million, accounting for 30% of quarterly net sales.
- The company raised full-year Modern Oral net sales guidance to $210 million to $225 million, from $180 million to $190 million.
2Firsts, May 8, 2026
According to Turning Point Brands, Inc.’s first-quarter 2026 earnings release, the company reported total consolidated net sales of $124.3 million for the quarter ended March 31, 2026, up 16.8% year on year. Gross profit increased 14.6% to $68.3 million.
Net income declined 19.0% to $11.7 million, while adjusted EBITDA decreased 6.5% to $25.9 million. Diluted EPS was $0.60 and adjusted diluted EPS was $0.76, compared with $0.79 and $0.91, respectively, in the same period a year earlier.
Modern Oral net sales increased 133%
The company said Modern Oral net sales increased 133% to $52.0 million in the first quarter of 2026, accounting for 42% of total company net sales, up from 21% in the first quarter of 2025.
Company raised full-year Modern Oral guidance
For 2026, Turning Point Brands raised its Modern Oral sales guidance.
The company now expects full-year Modern Oral gross sales of $280 million to $300 million, up from previous guidance of $220 million to $240 million.
It expects full-year Modern Oral net sales of $210 million to $225 million, up from $180 million to $190 million.
The company also introduced full-year adjusted EBITDA guidance of $70 million to $90 million, inclusive of investments in Modern Oral sales, marketing and trade promotions.
CEO said Q1 was driven by Modern Oral momentum
President and CEO Graham Purdy said the first quarter was driven by continued momentum in Modern Oral and disciplined execution across the portfolio. He said the company is investing in brands, commercial capabilities and consumer reach to capture share in white pouch, including through its recently announced TKO partnership featuring UFC.
Stoker’s segment net sales increased 48.1%
Stoker’s products segment net sales were $87.6 million in the first quarter, up 48.1% year on year and representing 70% of total quarterly net sales. The company said the increase was driven by triple-digit growth in Modern Oral net sales. Segment gross profit increased 39.1% to $47.3 million. Gross profit as a percentage of net sales fell to 54.0% from 57.5% a year earlier, primarily driven by margin contribution from Modern Oral products.
Zig-Zag segment net sales decreased 22.4%
Zig-Zag products segment net sales were $36.7 million, down 22.4% year on year and representing 30% of total quarterly net sales. The company said the decline was driven primarily by lower U.S. papers and wraps shipments.
Segment gross profit decreased 18.1% to $20.9 million. Gross profit as a percentage of net sales rose to 57.1% from 54.1% a year earlier, driven primarily by product mix.
Sales and marketing investments increased SG&A expenses
The company said first-quarter investment focused on sales and marketing efforts to support distribution and brand building.
Consolidated selling, general and administrative expenses increased 53.2% year on year to $55.8 million, including Modern Oral-related sales and marketing investments and increased outbound freight costs.
Ending cash was $192.4 million
As of March 31, 2026, ending cash was $192.4 million and net debt was $101.4 million. The company ended the quarter with total liquidity of $265.0 million, comprising $192.4 million in cash and $72.6 million of asset-backed revolving credit facility capacity.
Financial statements showed lower operating income
According to the consolidated statements of income on page 5 of the release, operating income was $12.5 million in the first quarter of 2026, compared with $23.2 million in the first quarter of 2025. Net income attributable to Turning Point Brands, Inc. was $11.7 million, compared with $14.4 million a year earlier.
Operating cash flow turned negative
According to the cash flow statement on page 7 of the release, the company used $22.3 million in cash from operating activities in the first quarter of 2026, compared with $17.4 million provided by operating activities in the same period of 2025. During the period, inventories increased by $21.7 million and accrued liabilities and other items decreased by $21.7 million.
Adjusted EBITDA was $25.9 million
According to Schedule A on page 9, adjusted EBITDA was $25.9 million in the first quarter of 2026, compared with $27.7 million in the same period of 2025.
Adjustments included a $5.9 million tariff adjustment, $2.9 million in stock-based compensation, $0.6 million in manufacturing start-up costs and $0.3 million in FDA PMTA-related costs.
Adjusted net income was $14.8 million
According to Schedule B on page 10, adjusted net income was $14.8 million in the first quarter of 2026, and adjusted diluted EPS was $0.76. In the first quarter of 2025, adjusted net income was $16.7 million and adjusted diluted EPS was $0.91.
Company said products are available in more than 220,000 retail outlets
Turning Point Brands said it manufactures, markets and distributes branded consumer products including alternative smoking accessories and consumables with active ingredients. Its brand portfolio includes Zig-Zag, Stoker’s, FRE and ALP.
The company said its products are available in more than 220,000 retail outlets in North America and on sites including zigzag.com, frepouch.com and alppouch.com.
Image Source: Turning Point Brands
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