Turning Point Brands (TPB) reported net sales of $102.9 million in the second quarter ended June 30, 2022, down 16.1 percent from the comparable 2021 quarter. Net sales of new-generation products declined by 45.1 percent while gross profit decreased 14.2 percent to $51.5 million. Combined net sales for Zig-Zag and Stoker’s products demonstrated comparative resilience and decreased by 0.9 percent for the quarter.
“We are pleased with the stable performance of both the Zig-Zag and Stoker’s segments during the quarter in light of a heightened inflationary environment for our customers, with rising prices at the pump impacting consumer traffic in convenience stores,” said TPB President and CEO Yavor Efremov in a statement.
“While overall sales decreased 16 percent from the previous year, Zig-Zag and Stoker’s sales were steady despite weakness in the wraps and loose leaf subsegments. Zig-Zag maintained its leading positions in both the roll-your-own paper and cigar wraps markets while Stoker’s MST experienced accelerated share gains driven by consumer trade-down to the value category.
“Despite NewGen revenue decreasing 45 percent from last year, the segment remained relatively stable from the previous quarter and profitable as we continue to monitor FDA regulatory developments. We continued to deploy a substantial amount of our free cash flow toward share repurchases during the quarter while maintaining a strong balance sheet, providing us with optionality on further capital deployment.”
“Going forward, we maintain a favorable outlook on our underlying business and our competitive positioning. However, given the market environment during the second quarter, along with continued inflationary pressures and resulting uncertainty of consumer confidence, we feel it is prudent to adjust our outlook for the year.”
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