Turning Point Brands, Inc. Q1 FY2026 earnings call

• Graham Purdy noted strong momentum in Modern Oral with 167% and 133% year-over-year gross and net sales growth. Believes in generational shift in nicotine consumption and positioning to capture share. Strengthening sales force, marketing, and commercial capabilities. Prioritizing winning in nicotine pouches, confident FRE and ALP will be scaled brands. • Summer Frein discussed go-to-market execution in nicotine pouch segment, progress in securing chain store wins, brand building partnerships like with TKO properties, and continued execution for Zig-Zag. • Andrew Flynn went through consolidated financial results, discussed Modern Oral guidance increase, EBITDA guidance, and capital allocation.

Consolidated sales were $124.3 million, up 17% year-over-year. Modern Oral had gross and net sales up 167% and 133% year-over-year, with 42% of total revenue in Q1 2026. Stoker's segment net sales increased 48% to $88 million, accounting for 70% of consolidated net sales. Legacy Stoker's brands net revenue decreased 3.5% to $36 million. Zig-Zag segment net sales were down 22% to $36.7 million. Modern Oral nicotine pouch net sales were up 133% to $52 million, gross revenue $69 million up 167%. Stoker's gross profit increased 39% to $47 million, gross margin 54% down 350 basis points. Zig-Zag gross profit decreased 18% to $20.9 million, gross margin 57.1% up 300 basis points.

• Increased full year 2026 Modern Oral guidance: gross sales $280 - $300 million (previously $220 - $240 million), net sales $210 - $225 million (previously $180 - $190 million). • Introduced full year EBITDA guidance $70 - $90 million, inclusive of increased nicotine pouch investments. • Expect effective income tax rate 23% - 26% going forward. • Budgeted 2026 CapEx $4 - $5 million excluding Modern Oral projects, and $3 - $5 million for PMTAs. • Expect to spend $80 - $105 million on sales force expansion and marketing in 2026.

Q: Congrats on strong results, raised Modern Oral guidance. How did chain wins compare to expectations, when to see on shelves, impact on gross vs net sales?

A: Summer Frein said excited about springtime negotiations, store count to increase 70% by end of year, stores will roll out over balance of year. Andrew Flynn said expect net sales pickup in back half for modern oral category.

Q: Question on PMTA process and Louisville plant.

A: Graham Purdy said PMTA is rigorous, timing not surprising, respecting process. On Louisville plant, made progress with infrastructure, feel good about throughput.

Q: On go-to-market portfolio, marketing strategy, and synergistic effects.

A: Summer Frein said retailers, consumers, sales organization excited about having both brands, brands have distinct consumer bases, room in category for both.

Q: On rising fuel price environment and impact on visits/consumer behavior.

A: Graham Purdy said fuel prices transient, heritage businesses may be affected, but TPB well positioned with Stoker's products.

Q: On retail landscape, appetite for changing carry of FRE and ALP with TKO deal.

A: Summer Frein said excited about TKO deal, gives credibility as long-term investor, early consumer excitement and events.

Q: On EBITDA guidance range, assumptions.

A: Andrew Flynn said EBITDA guide driven by sales force, retail distribution, marketing spend, outbound freight costs, spending dependent on sales, TKO agreement and chain wins provide upside.

Q: On potential for more sponsorships and impact on EBITDA.

A: Summer Frein said excited about TKO investment, doing other marketing activities, Andrew Flynn said will invest prudently, judicious about spending.