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Cannabis accessories maker Turning Point tops Q1 earnings estimates, raises guidance

Economy, Finance

Turning Points Brands Inc. shares rose about 3% in premarket trade Tuesday, after the maker of vapes and other accessories for the cannabis market . The Louisville, Kentucky-based company posted net income of $11.8 million, or 57 cents a share, for the quarter, up from $4.5 million, or 22 cents a share, in the year-earlier period. Adjusted per-share earnings came to 80 cents, well ahead of the 58 cents FactSet consensus. Sales rose 18.7% to $107.6 million, also ahead of the $100.0 million FactSet consensus. “Zig-Zag led the way with a second consecutive quarter with over 40 percent growth, and Stoker’s delivered another double-digit growth quarter led by our MST business,” Chief Executive Larry Wexler said in a statement. The Zig-Zag products segment accounted for 38% of total net sales in the period, climbing 42% to $41.0 million. Growth was driven by double-digit advances in U.S. rolling papers, Make-Your-Own (“MYO”) cigar wraps and Canadian papers which also benefitted from a shipment delayed from the fourth quarter. “With more states advancing legalization efforts during the quarter, the segment’s outlook continues to improve as a result of the secular industry growth trends that we are seeing across the board,” said Chief Operating Officer Graham Purdy. The company raised the guidance provided on Feb. 10 and now expects 2021 sales of $422 million to $440 million, up from $412 million to $432 million previously. It expects Zig-Zag products to grow by strong double digits, compared with prior guidance of double-digit growth. The company expects second-quarter sales of $103 million to $109 million. The FactSet consensus is for 2021 sales of $432.4 million and second-quarter sales of $105.6 million. Shares have gained 9% in the year to date, while the Cannabis ETF has gained 46% and the S&P 500 has gained 11.5%.

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