Turning Point Brands, Inc.: Q2 FY2026 earnings call

What management said about Q2 FY2026, from the documents filed with the SEC on 4 August 2026: press release. Guidance figures: 2 raised, 1 lowered, 1 kept. The quarter’s numbers.

Read the filing

Key takeaways

• Modern Oral net sales more than doubled: Modern Oral gross revenue rose 149% to $87.0 million and net sales rose 128% to $68.4 million, up from $52.0 million of net sales in the first quarter. Source
• Net income and EPS declined: Net income attributable to Turning Point Brands fell 75.2% to $3.6 million. Diluted EPS was $0.18 against $0.79; adjusted diluted EPS was $0.23 against $0.98. Source
• Adjusted EBITDA fell 50.0%: Adjusted EBITDA was $15.2 million against $30.5 million a year earlier, inclusive of strategic sales and marketing investments. First-quarter Adjusted EBITDA was $25.9 million. Source
• SG&A rose 91.1%: SG&A rose 91.1% to $76.9 million from $40.3 million, with spending on Modern Oral sales and marketing and higher outbound freight costs. Source
• Gross profit included tariff refund: Gross profit rose 40.6% to $93.7 million, including out-of-period cost of sales tied to a tariff refund. Excluding that item, gross profit was $81.5 million. Source
• Net debt fell to $31.7 million: Net debt was $31.7 million at June 30, 2026, against $101.4 million at March 31, 2026, inclusive of about $59.6 million of equity raised in the quarter. Source

“We delivered another strong quarter, highlighted by continued growth in Modern Oral.”

Graham Purdy, President and CEO

Guidance

What changed from last quarter

• Guidance raised: Full-year 2026 Modern Oral gross sales guidance raised to $330-$350 million from $280-$300 million. Source
• Guidance raised: Full-year 2026 Modern Oral net sales guidance raised to $260-$270 million from $210-$225 million. Source
• Guidance kept: Full-year 2026 Adjusted EBITDA guidance held at $70-$90 million, as in the first-quarter release. Source
• Guidance lowered: Projected quarterly tax rate for 2026 used in adjusted figures lowered to 22% from 24%. Source
• New: Equity raised in the quarter of about $59.6 million; the first-quarter release reported no equity proceeds. Source

Results and growth drivers

• Net sales rose 22.6%: Total consolidated net sales rose 22.6% to $142.9 million, compared with $116.6 million in the second quarter of 2025. Source
• Modern Oral net sales more than doubled: Modern Oral gross revenue rose 149% to $87.0 million and net sales rose 128% to $68.4 million, up from $52.0 million of net sales in the first quarter. Source
• Modern Oral share reached 48%: Modern Oral accounted for 48% of total company net sales, up from 26% in the second quarter of 2025 and 42% in the first quarter of 2026. Source
• Net income and EPS declined: Net income attributable to Turning Point Brands fell 75.2% to $3.6 million. Diluted EPS was $0.18 against $0.79; adjusted diluted EPS was $0.23 against $0.98. Source
• Adjusted EBITDA fell 50.0%: Adjusted EBITDA was $15.2 million against $30.5 million a year earlier, inclusive of strategic sales and marketing investments. First-quarter Adjusted EBITDA was $25.9 million. Source

Segment sales and gross profit

• Stoker's net sales rose 54.5%: Stoker's segment net sales rose 54.5% to $107.6 million, 75% of total net sales, with triple-digit Modern Oral growth. Segment gross profit rose 63.3% to $71.1 million. Source
• Zig-Zag net sales fell 24.8%: Zig-Zag segment net sales were $35.4 million, 25% of total net sales, down 24.8% year over year. The segment paragraph describes a 3.5% decline compared with the first quarter of 2026. Source
• Zig-Zag gross profit fell 2.1%: Zig-Zag gross profit fell 2.1% to $22.6 million. Adjusted for out-of-period tariff-refund cost of sales, Zig-Zag gross profit was $20.3 million. Source

“We believe our investments in retail distribution, commercial capabilities and brand development are translating into stronger consumer adoption and expanding market access for both FRE and ALP.”

Graham Purdy, President and CEO

Costs and operating expenses

• SG&A rose 91.1%: SG&A rose 91.1% to $76.9 million from $40.3 million, with spending on Modern Oral sales and marketing and higher outbound freight costs. Source
• FDA PMTA costs nearly doubled: FDA PMTA costs were $3.2 million in the quarter, against $1.7 million a year earlier, and are added back in Adjusted EBITDA. Source
• Stock comp and start-up costs added back: Stock-based compensation of $2.7 million and manufacturing start-up costs of $0.7 million were also added back in Adjusted EBITDA. Source

Margins and pricing

• Gross profit included tariff refund: Gross profit rose 40.6% to $93.7 million, including out-of-period cost of sales tied to a tariff refund. Excluding that item, gross profit was $81.5 million. Source
• Stoker's adjusted gross margin fell: Stoker's adjusted gross profit as a percentage of net sales was 56.9%, down from 62.5% a year earlier, due to higher chain penetration. Source
• Zig-Zag adjusted gross margin rose: Zig-Zag adjusted gross profit as a percentage of net sales rose to 57.3% from 49.1% a year earlier, driven primarily by product mix. Source

“The progress we're making today positions us to capitalize on the continued shift in nicotine consumption toward modern oral to maximize long-term shareholder value.”

Graham Purdy, President and CEO

Demand and market reach

• Management cites shift toward modern oral: Management said the company is positioned to capitalize on a continued shift in nicotine consumption toward modern oral. Source
• Zig-Zag decline has no stated cause: The second-quarter release gives no cause for the Zig-Zag decline. The first-quarter release attributed the Zig-Zag decline to lower U.S. papers and wraps shipments.
• Retail reach across North America: The company says its products are available in more than 220,000 retail outlets in North America, plus online sites for its brands. Source

Cash, debt and adjusted measures

• Net debt fell to $31.7 million: Net debt was $31.7 million at June 30, 2026, against $101.4 million at March 31, 2026, inclusive of about $59.6 million of equity raised in the quarter. Source
• Liquidity totaled $339.0 million: Cash was $268.3 million at June 30, 2026. Total liquidity was $339.0 million, including $70.7 million of asset-backed revolving credit facility availability. Source
• Tariff adjustment in Adjusted EBITDA: A tariff adjustment of negative $8.5 million is part of the Adjusted EBITDA reconciliation, which starts from EBITDA of $14.3 million. Source

Coming up, as management said on 4 August 2026

• Form 10-Q to follow: Final second-quarter figures will appear in the Form 10-Q for the quarter ended June 30, 2026, and may differ from the preliminary figures in this release. Source

Risks management discussed

• Regulatory: Two product lines remain subject to the FDA PMTA process, which can take multiple years; PMTA costs were $3.2 million in the quarter. Source
• Operational: Outbound freight costs increased in the quarter and are reported within SG&A alongside Modern Oral marketing spend. Source
• External: Tariffs subject to refund are treated as out-of-period cost of goods sold and are excluded from the non-GAAP measures. Source

Other quarters

• Q3 FY2026 earnings call
• Q1 FY2026 earnings call
• Q4 FY2025 earnings call
• Q3 FY2025 results

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.