Turning Point Brands, Inc. (NYSE:TPB) Q1 2024 Earnings Call Transcript

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Scott Fortune: A follow-up there. And then just digging in a little more color on the continued penetration into the alternative channel and providing maybe a little more metrics there around that penetration levels where you’re at? I know Summer has mentioned, you guys are getting positive shelf-based gains here and product strength selling into that channel. But just kind of a little more color on the SKUs or products that are really increasing the market share in that channel, if you can provide that?

Graham Purdy: Yes. So as we previously mentioned, we believe based on our internal metrics that, that channel is growing. And I think if you look at year-over-year as well as sequential growth of 60%, I’m pretty confident to say that we feel like we’re growing share. And I don’t think that, that is a surprise given the fact that we have broadened the portfolio and created more product offerings to create more consumer appeal for the Zig-Zag brand as well as occupying more shelf space to make Zig-Zag more relevant. As it relates to metrics, I would anticipate over time that we will provide more clarity there, but we think we’re still way in the early innings of our penetration in that channel. So at this point in time, our focus is to continue to find new retail stores, continue to find more distributors that service that space, continue to keep our head down, focus on the right product mix for the end consumer in those stores.

And we think that things will happen if we continue on that plan.

Scott Fortune: Got it. And then last question for me, just kind of focusing on Stoker’s a little bit. You’re seeing nice continued market growth there as Modern Oral is weighing on kind of the more of the smokeless tobacco side of things and taking share there, but can you provide a little color on the competitive front? Are you seeing more competition from a pricing landscape with more focus towards the oral side of things? Just kind of a little bit color on continuing that growth going forward and the competitive movement here.

Graham Purdy: Yes. We were – I think we are pleased with our results in the quarter for FRE as we really started down the street to gain penetration into the retail landscape. We’ve got a really nice online business where we speak directly to the end consumer. The category is on fire. As you sort of look out, I’m not sure that the category can sustain 73% year-over-year growth. It grew 16.5% on a sequential basis. There is competitive activity within that channel, but you would expect that with the umbrella of growth that, that category provides. We still think we’re well positioned with the product offerings that we have, catering to the consumer that’s looking for more satisfaction. I mentioned the mouthfeel before. We think we – our product really stacks up well from a mouthfeel perspective. And so we’re going to continue moving forward and gaining new stores and engaging more consumers into the brand.

Operator: We have no further questions in queue. I would like to turn the call back over to Graham Purdy for any closing remarks.

Graham Purdy : Thanks, operator. Thank you, everybody, for joining our call. We felt really good about Q1, and we’re looking forward to speaking to you again here in a few months on our Q2 results. So thank you very much.

Operator: This concludes today’s conference call. Thank you for your participation. You may now disconnect.

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