Turning Point Brands nicotine pouch sales double as profit falls 81%

Turning Point Brands’ modern oral nicotine pouch business reached 49.2% of group net sales in the third quarter, up from about 31% a year earlier, as net income fell on marketing and regulatory spending.

Modern Oral net sales nearly doubled to $74.4 million

The company reported third-quarter net sales for the segment of $74.4 million, up 102.9% from a year earlier, on gross sales of $93.9 million, up 114.2%. The figures cover both the FRE and ALP pouch brands.

TPB has not split the quarterly net sales between the two brands in this filing, so the segment number cannot be read as a single-brand result. Management said on the 9 November earnings call that Modern Oral gross and net sales each rose about 8% and 9% on the prior quarter.

Group total net sales rose 27.0% to $151.1 million, above last year’s $119.0 million. Gross profit rose 20.9% to $85.2 million.

Net income fell 81.4% as SG&A and PMTA costs rose

SG&A expenses rose 69.1% to $75.3 million, which the company tied to FRE and ALP sales and marketing, retail channel work and outbound freight.

Non-GAAP adjustments show about $3.15 million in PMTA-related expense for the quarter, against $482,000 a year earlier, plus about $593,000 in manufacturing start-up costs.

FRE works through chains while ALP pushes beyond independents

Chief revenue officer Summer Frein said on the call that FRE is entering more national and regional retail chains and widening its shelf sets with existing customers. Management cautioned that chain listings roll out store by store on each retailer’s shelf-reset cycle, so a distribution win does not mean every store in a network already stocks the product.

ALP started online, then moved into independent stores; TPB is now adding regional chains and negotiating with some large retailers. TPB expects its modern oral chain-store footprint to grow more than 70% in 2026 from the start of the year. That figure describes the company’s own chain coverage, not national retail penetration.

TPB has flagged plans to start US manufacturing in 2027 but has not fixed a production date, tying the timing to FDA premarket review progress.

ALP opens a SoHo pop-up on 13 November

ALP Supply Co. LLC said it will open an ALP Saloon pop-up at 433 Broadway in Manhattan on 13 November, trading daily from 11:30 to 18:30. Entry requires proof of age 21 or over with government photo ID; the store sells ALP pouches and New York-exclusive merchandise.

ALP plans outdoor advertising and marketing in Times Square and elsewhere in Manhattan from mid-November 2026 into January 2027. The company calls the space the first flagship-style retail outlet for a nicotine pouch brand; that claim comes from ALP and has not been independently confirmed.

TPB’s subsidiary bought 50% of ALP Supply Co. LLC for $800,000 in September 2024, alongside Last Country Ventures, LLC, according to the 2025 annual report. TPB supplies ALP with product and provides warehousing, transport and a $10 million credit line, and consolidates ALP as a variable interest entity. ALP launched in November 2024 with 3mg, 6mg and 9mg pouches in mint, wintergreen and fruit flavours.

Guidance holds despite the profit drop

TPB reaffirmed full-year 2026 Modern Oral gross sales of $330 million to $350 million, net sales of $260 million to $270 million and adjusted EBITDA of $70 million to $80 million. These are forecasts, not reported results.

The balance sheet showed $251.3 million in cash and $48.7 million in net debt at 30 September, with total liquidity of about $322.8 million including $71.5 million available under an asset-based revolver. TPB bought back 167,161 shares for about $10 million during the quarter.

What the numbers change for suppliers and distributors

Analysis: the pouch mix shift is pulling group economics away from Zig-Zag papers and toward a category where retail listings arrive chain by chain, so order timing for pouches depends on shelf-reset schedules rather than announcement dates. The $3.15 million quarterly PMTA line and the unresolved manufacturing start date signal that compliance and domestic production costs will keep weighing on margin before 2027 capacity arrives.

Investors and trade partners next watch the FDA’s handling of the pending applications and the 2027 manufacturing start, neither of which TPB has dated.

Questions readers ask

How much did Turning Point Brands' nicotine pouch sales grow in Q3 2026?

Modern Oral net sales rose 102.9% to $74.4 million and gross sales rose 114.2% to $93.9 million, according to the company's third-quarter results. The figures combine the FRE and ALP brands, which TPB did not break out separately.