Turning Point Brands (TPB), a tobacco sales company in the United States, has reported a 1.9% decrease in net sales revenue for the third quarter ending on September 30, 2022, amounting to $107.8 million.
The net sales of the cigarette brands Zig-Zag and Stoker's increased by 23.3% and 10%, respectively, while the net sales of the new generation products decreased by 40.3%. The gross profit amounted to USD 52.7 million, which was a 2.9% decrease, and the net profit was USD 11.5 million, which was a 14.3% decrease.
Graham Purdy, President and CEO of TPB, stated in a declaration that despite economic challenges and ongoing inflation affecting consumers, the niche markets of Zig-Zag and Stoker demonstrated robust double-digit growth this quarter.
Zig-Zag has benefited from the solid growth of its US and Canadian newspaper businesses this quarter, as well as the successful launch of the CLIPPER lighter.
Meanwhile, Stoker's wet smokeless tobacco (MST) product has experienced continued market share growth driven by price reductions targeted at value-focused consumers. Sales of the new generation tobacco products saw a slight decline compared to the previous quarter, but despite ongoing regulatory developments being monitored, the sector remained profitable.
In this quarter, we will continue to return capital to shareholders while maintaining a strong cash balance to navigate the current financing environment. Although our competitive position remains strong and we have outperformed the market this quarter, we are adjusting our outlook for this year given the current economic conditions.
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