Turning Point Brands 2025 Q1 Earnings Strong Performance as Net Income Rises 19.8%

Turning Point Brands (TPB) reported its fiscal 2025 Q1 earnings on May 7th, 2025. The company posted a significant 28.1% increase in revenue compared to the previous year, reaching $106.44 million. Net income also saw a robust rise, climbing 19.8% to $14.39 million. Adjusted earnings per share stood at $0.91, surpassing the prior year's $0.80. The company raised its guidance for Modern Oral sales, indicating a positive outlook for the year.

Revenue

Turning Point Brands experienced a notable growth in revenue for Q1 2025, reaching $106.44 million, a 28.1% increase from the previous year. Zig-Zag products generated $47.27 million, while Stoker’s products contributed $59.17 million to the total revenue.

Earnings/Net Income

Turning Point Brands's EPS rose 19.1% to $0.81 in 2025 Q1 from $0.68 in 2024 Q1, marking continued earnings growth. Meanwhile, the company's profitability strengthened with net income of $15.79 million in 2025 Q1, marking 29.7% growth from $12.18 million in 2024 Q1. The Company has sustained profitability for 11 years over the corresponding fiscal quarter, reflecting stable business performance. The EPS improvement indicates strong financial health.

Price Action

The stock price of Turning Point Brands has jumped 9.42% during the latest trading day, has surged 31.96% during the most recent full trading week, and has surged 48.54% month-to-date.

Post-Earnings Price Action Review

In the past five years, investing in Turning Point Brands (TPB) shares following a quarter-over-quarter revenue increase and holding for 30 days yielded a 9.57% return, which underperformed the benchmark by 74.52%. This strategy's compound annual growth rate was 1.85%, with a maximum drawdown of -8.88% and a Sharpe ratio of 0.24, reflecting modest risk-adjusted returns. Despite recent stock price surges, historical performance suggests a cautious approach for investors seeking short-term gains. The strategy's results emphasize the importance of broader market conditions and alternative investment approaches to achieve superior returns.

CEO Commentary

Graham Purdy, President and CEO, expressed satisfaction with the Q1 results, highlighting a significant year-over-year increase in Modern Oral sales to $22.3 million, which nearly grew tenfold compared to the previous year and almost doubled from the last quarter. He noted that Stoker's MST and looseleaf products exceeded expectations, while Zig-Zag performance aligned with forecasts. The CEO maintained an optimistic tone, reflecting confidence in growth drivers such as strong sales in the Stoker's segment and ongoing market demand for their products.

Guidance

The Company is increasing its projected Modern Oral sales guidance for 2025 to a range of $80.0 million to $95.0 million, up from the previous estimate of $60.0 million to $80.0 million. Turning Point Brands is reaffirming its full-year 2025 Adjusted EBITDA guidance, expecting it to remain between $108.0 million and $113.0 million.

Additional News

In recent weeks, Turning Point Brands has seen significant activity beyond its earnings report. Notably, Wells Fargo & Company MN increased its stake in the company by 46.1% during the fourth quarter, reflecting growing institutional interest. Additionally, Turning Point Brands announced an increase in its quarterly dividend to $0.075 per share, marking a positive change from the previous $0.07 per share. This move underscores the company's commitment to returning value to shareholders. Furthermore, market analysts have issued new price targets for TPB shares, with several recommending a "buy" rating, highlighting confidence in the company's future prospects.