Turning Point Brands Reports 11% Revenue Growth to $360.7 Million for Fiscal Year 2024

Turning Point Brands, Inc. reported a significant increase in its financial performance for the fiscal year ending December 31, 2024, with total net sales reaching $360.7 million, an 11% increase from $325.1 million in 2023. The growth was driven by strong sales in both the Zig-Zag and Stoker’s product segments, which saw increases of 6.6% and 16.4%, respectively. The company’s gross profit also rose to $201.6 million, up 10.2% from the previous year, although the gross profit margin slightly decreased to 55.9% due to a higher proportion of lower-margin products sold.

In terms of profitability, Turning Point Brands reported a consolidated net income from continuing operations of $48 million, a 26.2% increase compared to $38.1 million in 2023. This growth in net income was attributed to increased sales volumes and improved pricing strategies, despite rising selling, general, and administrative expenses, which increased by 17.3% to $122.4 million. The company also noted a decrease in its income tax expense, which fell by 29.5% to $16.9 million, contributing to the overall increase in net income.

Strategically, the company underwent a significant operational shift by divesting its Creative Distribution Solutions (CDS) segment, which was classified as discontinued operations. This move, effective January 2, 2025, involved contributing 100% of its interest in South Beach Brands LLC to General Wireless Operations, Inc. in exchange for a 49% equity stake in the joint venture. This divestiture allows Turning Point Brands to focus on its core Zig-Zag and Stoker’s product lines, which are expected to drive future growth.

Operationally, the company expanded its distribution network, reaching approximately 220,000 retail locations across North America, including a growing e-commerce presence. The total employee headcount as of December 31, 2024, was 310, reflecting the company's commitment to maintaining a skilled workforce to support its growth initiatives. The company also reported a positive correlation between increased sales force activity and market share growth, particularly in the Stoker’s segment, which continues to gain traction in the moist snuff tobacco market.

Looking ahead, Turning Point Brands expressed optimism about its growth trajectory, particularly in the modern oral nicotine product category, which is experiencing rapid expansion. The company plans to leverage its strong brand portfolio and distribution capabilities to capitalize on emerging market trends, including the increasing acceptance of cannabinoid products. However, the company remains cautious about potential regulatory changes and market conditions that could impact its operations and financial performance.