The following is a summary of the Turning Point Brands (TPB) Q2 2024 Earnings Call Transcript:

Financial Performance:

• Turning Point Brands (TPB) reported a Q2 revenue of $108.5 million, up 2.8% sequentially.

• Adjusted EBITDA increased 7% to $27 million, leading to an upward revision of the 2024 adjusted EBITDA outlook to $98 million to $102 million.

• Gross margin slightly declined by 8 basis points to 49.6% due to product mix shifts.

Business Progress:

• Zig-Zag brand continues to strengthen its position with $50.5 million in revenue this quarter, supported by an expanded range of products including Mini Rose Cones.

• Stoker's brand grew significantly with a 19% revenue increase to $42.7 million, driven by increased market share and pricing power.

Opportunities:

• The ongoing expansion into alternative channels for retail (head shops and dispensaries) combines with an expanded portfolio, presenting significant growth opportunities, particularly as states liberalize cannabis regulations.

• FRE, a newly launched product in the modern oral category, is gaining rapid traction with sales more than tripling this quarter, projecting significant market potential.

Risks:

• The differentiation and measurement of alt versus traditional C-store sales are becoming challenging as the lines between these channels blur.

• Continuous regulatory reviews and compliance for Modern Oral products could affect time-to-market and product availability.

More details: Turning Point Brands IR

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