Category: Financial

RLX Technology Report Shows Revenue ‘Challenges’

Photo: RLX Technology
RLX Technology reported net revenues of RMB428.1 million ($58.7 million) in the third quarter of 2023, compared with RMB1.04 billion in the same period of 2022. Gross margin was 24.7 percent in the third quarter of 2023, compared with 50 percent in the comparable 2022 quarter. GAAP net income was RMB172.7 million, down from RMB505.2 million in the prior-year period.
“The end of the third quarter of 2023 marked one year since the new regulatory framework for the e-vapor industry came into effect,” said Ying (Kate) Wang, co-founder, chairperson and CEO of RLX Technology, in a statement.
“As a legitimate industry participant, we have remained dedicated to developing our product portfolio to provide adult smokers with compliant, superior-quality products. While we have made some progress with our recovery, we are still facing external challenges, especially the impact of illegal products. We recognize that many users are still unaware of these new regulations, such as flavor restrictions, which has slowed their adoption of the new national standard products.
“To address these near-term obstacles, we will forge ahead with our core strategy: providing a wide variety of quality, compliant products across an extensive range of price points to meet users’ various needs. Meanwhile, we are making efforts to enhance users’ understanding of the new regulations and collaborating with regulators to combat illegal products and create a healthy and orderly market. As a trusted e-vapor brand for adult smokers, we believe that more users will gradually switch to our products as increased awareness of the new regulations and the dangers of substandard, illegal products rises.”
“In the third quarter of 2023, we continued to face significant headwinds due to competition from illegal products,” added RLX Technology Chief Financial Officer Chao Lu. “Against this challenging backdrop, we resolutely executed our strategy and focused on improving profitability, which continues to be our top priority.
“Our strategic cost optimization initiatives have begun to demonstrate positive outcomes, including a consistent reduction in our non-GAAP operating loss and signs of recovery in our non-GAAP net profit margin. Notably, we achieved a second consecutive quarter of positive operating cash flow this quarter, underscoring our business’ resilience in the post-regulatory era. Looking forward, we will remain committed to enhancing our financial performance and delivering sustainable value to our shareholders.”

November 13, 2023
Altria: Illicit Disposable Vapes Impacting NJOY Sales

Credit: Apichat
Altria says a booming illegal disposable flavored vape market is causing a major decline in the sales of its authorized vaping products.
Sal Mancuso, Altria’s CFO, pointed out on a call with select media and financial analysts that traditional cigarette industry volumes had dropped even more than usual in the third quarter. The decline was caused by inflation and economic issues influencing customers, as well as the heightened usage of illegal flavored disposable e-cigarettes.
Mancuso further stated that there appeared to be more switching between different categories than initially assumed and that e-cigarettes alone were causing a 1.5 percent to 2.5 percent reduction in traditional cigarette industry volumes.
BAT subsidiary R.J. Reynolds Vapor Co. holds the top market share in the U.S. at 41.8 percent as of the latest Nielsen convenience store report released Oct. 7.
NJOY, which Altria purchased for $2.75 billion in June, has struggled to increase its No. 3 market share.
“The current state of the (vaping) market is intolerable for both legitimate manufacturers and consumers,” Billy Gifford, Altria’s CEO, said during the call. “As we have noted repeatedly for months, the regulated market is being overrun by illegal-flavored disposable e-vapor products made and distributed by companies violating virtually every rule and guidance FDA has issued since 2016.
“A lot of these products are imported. They’re imported illegally and then they’re sold illegally.”
Saying a “strong course correction is needed,” Gifford noted that Altria has filed federal lawsuits in California against 34 organizations that include manufacturers, distributors and online retailers.
October 28, 2023
Altria Revenues Down 4.1 Percent, NJOY Growing

Photo: Phimwilai
Altria Group reported net revenues of $6.28 billion in the third quarter of 2023, down 4.1 percent from the comparable 2022 quarter. The decrease was driven primarily by lower net revenues in the company’s smokeable products segment.
Altria’s domestic cigarette shipment volume decreased 11.6 percent from quarter to quarter, driven by the industry’s overall decline rate, retail share losses, calendar differences and trade inventory movements, among other factors.
Following the completion of its Njoy Holdings acquisition on June 1, 2023, Altria has been strengthening Njoy’s global supply chain to support the anticipated volume increase associated with its expansion plans for the Njoy Ace brand.
The company shipped 7.5 million Ace pods during the quarter. The retail share of Ace pods in U.S. muti-outlet and convenience stores was essentially unchanged since the completion of the Njoy transaction.
The U.S. cigarette retail share of Altria’s Marlboro brand dropped 0.3 points, to 42.3 percent versus the prior-year quarter, primary due to increased macroeconomic pressures on disposable income and increased competitive activity.
Net revenues in the oral tobacco products segment increased 2.2 percent, driven by higher pricing and lower promotional investments.
“Our highly profitable traditional tobacco businesses were resilient in a dynamic operating environment during the third quarter and first nine months, providing fuel for our business transformation and significant cash returns to our shareholders,” said Altria CEO Billy Gifford in a statement.
“I believe we have the appropriate strategies and people in place to execute our growth plans. I continue to believe that we can achieve our vision and create long-term value for our shareholders.”
October 26, 2023
Ispire Technology Reports 2023 Annual Earnings

Ispire Technology Inc, a vapor technology, has announced its financial results for the fiscal year 2023, which ended on June 30, 2023.
Fiscal year 2023 marked a significant milestone for Ispire, with a 100.4% and 10.9% surge in cannabis and tobacco vaping products revenues, respectively from Fiscal year 2022, according to a press note.
Overall revenue Increased 31.2%. The growth was predominantly driven by the doubling of the revenues from our cannabis vaping products in the United States and a rise in sales of tobacco vaping products in Europe.
“Central to this success is our multi-pronged strategy: expanding our e-cigarette vaporizer technology sales and innovating our cannabis vaporizer offerings for both medical and recreational sectors. Our commitment to delivering industry-leading products has positioned Ispire at the forefront, cultivating a reputation for innovation and reliability,” said Michael Wang, the Co-Chief Executive Officer of Ispire. “The recent introduction of the Ispire ONETM technology in July 2023 further exemplifies our commitment to innovation and sets industry standards, particularly around consumer safety and operational efficiency. As part of our ongoing improvements, our California operations are set to launch our first fully automated assembly system by the end of December 2023.”
The company also announced it is actively exploring Southeast Asia as a potential hub for future manufacturing operations, “aiming to further optimize” its production capabilities.
September 27, 2023
UKVIA Separates Itself From Tobacco Firm Funding

British American Tobacco, Imperial Brands, Japan Tobacco International and Philip Morris International are no longer members of the UK Vaping Industry Association (UKVIA) the organization has announced.
In a statement from the UKVIA, the industry advocacy group states that it will no longer include any tobacco companies within its membership. It also will not be accepting any new applications for membership by vaping businesses wholly or part owned or acquired by tobacco companies moving forward.
The trade body states that “the interests of the industry would be best served by the association being independent of any involvement or funding from tobacco-owned vaping brands”.
It hopes to dispel “misconceptions” that the group is funded largely by tobacco companies and to overcome any potential restrictions tobacco companies may face when engaging with key stakeholders in the move to smokefree, according to media reports.
“In representing vaping-only businesses, many of which are independent firms founded on the back of personal loss of family members as a result of smoking combustible cigarettes, the UKVIA wants to be fully engaged with key stakeholders across the board as we have the same vision, which is to make smoking history,” the release states. “The association sees this as being a vital step in ensuring that the public health potential of vaping is fully realized and the sector making its fullest contribution to the delivery of the smoke free targets over the next few years to 2030.”
September 2, 2023
Net Revenues for 2Q 2023 Fall for RLX Technology

Kate Wang / Credit: RELX
RLX Technology announced its unaudited financial results for the second quarter ended June 30, 2023.
Net revenues were RMB378.1 million ($52.1 million) in the second quarter of 2023 compared with RMB2.2 billion in the same period of 2022.
The decrease was primarily due to the discontinuation of its older products and the negative impact of illegal products in the market after regulators’ special action ended in April, which disrupted users’ adoption of our new products that comply with national standards, according to the company.
Gross margin was 26.1 percent in the second quarter of 2023 compared with 43.8 percent in the same period of 2022. The decrease was primarily due to the imposition of a 36 percent excise tax, which came into effect on Nov. 1, 2022.
U.S. GAAP net income was RMB204.7 million in the second quarter of 2023 compared with U.S. GAAP net income of RMB441.6 million in the same period of 2022.
Non-GAAP net income was RMB86.2 million in the second quarter of 2023 compared with RMB634.7 million in the same period of 2022.
“During the second quarter of 2023, we continued to firmly execute our core strategy amid the challenging market environment,” said Ying (Kate) Wang, co-founder, chairperson of the board of directors and CEO of RLX Technology, in a statement. “Specifically, we remained dedicated to offering compliant, high-quality products while developing new products to meet users’ evolving needs.
“Though the recent resurgence of illegal products has had a lingering impact on our sales, we believe the impact will be temporary rather than a major trend that could derail our recovery trajectory. As a trusted e-vapor brand for adult smokers, we remain confident that, supported by regulatory oversight, our premium products will continue to win users’ trust and gradually supplant inferior and harmful illegal products. Moving forward, we will continue prioritizing product innovation, harm reduction and quality control initiatives while further enhancing our product portfolio as we strive to create sustainable value for all stakeholders.”
Chao Lu, chief financial officer of RLX Technology, added that the external challenges, especially the disruptions from illegal products, helped to deepen the company’s focus on efficiency and profitability improvement during the second quarter.
“Thanks to our supply chain optimizations and product design enhancements, our topline improved sequentially to RMB378.1 million, and our gross margin rebounded by 1.9 percentage points from the first quarter of 2023. We also strengthened cost control, which helped significantly narrow our non-GAAP operating loss,” said Chao. “Notably, our operating cash flow turned positive for the first time since the new regulations were enacted. We believe our strong cash position will continue to support us in navigating the evolving markets, and we will pursue further gains in cost optimization and efficiency improvement to accelerate the pace of recovery.”
The company hosted an earnings conference call at 8:00 a.m. U.S. Eastern Time on Aug. 18, 2023 (8:00 p.m. Beijing/Hong Kong Time on Aug. 18, 2023).
A live and archived webcast of the conference call will be available on the company’s investor relations website at https://ir.relxtech.com.
A replay of the conference call will be accessible approximately two hours after the conclusion of the call until Aug. 25, 2023.
August 18, 2023
Pyxus First Quarter Revenue Up Nearly 40 Percent

Pyxus International, parent to Purilum e-liquids, announced results for its fiscal quarter ended June 30, 2023.
Sales and other operating revenues were $477.1 million, up 38.7 percent compared to 2022. Operating income increased $29.4 million to $36.4 million. Net income was $0.8 million, improving $15.5 million. Adjusted EBITDA increased $27.5 million to $43.5 million.
For the full 2024 fiscal year, Pyxus continues to expect sales to be between $1.9 billion and $2.1 billion and adjusted EBITDA to be between $155 million and $180 million.
“Fiscal 2024 is off to a strong start with higher tobacco prices, accelerated timing of shipments and a favorable shift in customer mix fueling a 39 percent increase in revenue and improved profitability compared to the prior year,” said Pyxus President and CEO Pieter Sikkel in a statement.
“In the first quarter of fiscal 2024, we believe we reached the peak of our fiscal 2024 tobacco purchases as we significantly accelerated our buying, using our geographic footprint to acquire tobacco inventory from multiple markets to meet higher current crop supply requirements and customer demand for fiscal 2024. Customer shipments in fiscal 2024 will utilize a higher percentage of tobacco purchased during the current fiscal year to fulfill orders compared to the prior year given our uncommitted inventory continues to be historically low.
“Our continued focus on aggressively managing our working capital provided sufficient liquidity through short-term borrowings under our foreign seasonal lines of credit, availability under the ABL Credit Facility, cash generated from operations and cash collections from our securitized receivables to purchase larger volumes of more expensive tobacco compared to the prior year. In the first quarter of fiscal 2024, we increased our purchases of inventory by more than $100 million compared to the prior year using $40 million of incremental foreign seasonal lines of credit and our improved cash conversion cycle.
“We anticipate ongoing strong demand as undersupply conditions are expected to persist through fiscal 2024. We believe our positive first-quarter results position the company to achieve our previously announced fiscal 2024 guidance for sales between $1.9 billion and $2.1 billion and adjusted EBITDA between $155 million and $180 million. We are proud of the progress our global teams have made thus far and thank them for their unwavering commitment to our customers and their focus on achieving the company’s objectives so that together we can grow a better world.”
The company held a conference call to report financial results for the period ended June 30, 2023, on Aug. 10, 2023, at 9:00 a.m. Eastern Time. For those who were unable to listen to the live event, a telephonic replay of the conference call will be available by dialing (647) 362-9199 or (800) 770-2030 and entering the access code 2624736.
August 10, 2023
Turning Point Releases Second-Quarter Results

Image: Tobacco Reporter archive
Turning Point Brands (TPB) announced financial results for the second quarter ended June 30, 2023.
Total consolidated net sales increased 2.6 percent to $105.6 million compared to the second quarter of 2022. Zig-Zag Products net sales increased by 1.1 percent. Stoker’s Products net sales increased by 7.3 percent. Creative Distribution Solutions net sales decreased by 1.3 percent. Gross profit increased 2 percent to $52.5 million, and net income increased 83 percent to $9.9 million. Adjusted net income increased 8.4 percent to $15.3 million.
“Our second-quarter results demonstrated continued progress against our plan,” said TPB President and CEO Graham Purdy in a statement. “The Zig-Zag segment grew double-digits sequentially from the first quarter as trade inventory normalized. Stoker’s had another solid quarter of performance led by double-digit growth in Stoker’s MST [moist smokeless tobacco]. We opportunistically purchased another $15.1 million in aggregate principal amount of our convertible notes during the second quarter while maintaining a strong cash balance. Given our solid first-half performance, we are raising our guidance for the full year.”
For the second quarter, Zig-Zag Products net sales increased 1.1 percent to $46.7 million. TPB’s Canadian and other smoking accessories businesses saw strong growth during the quarter, which was partially offset by declines in the U.S. rolling papers and wraps businesses.
For the quarter, the Zig-Zag Products segment gross profit was steady at $26.4 million. Gross margin declined 60 basis points to 56.6 percent, driven primarily by product mix.
“Our e-commerce business had another quarter of double-digit growth as we continue to build our omnichannel presence,” said Purdy. “We remain encouraged by our prospects with secular cannabis consumption growth trends driving demand for our products.”
For the second quarter, Stoker’s Products net sales increased 7.3 percent to $36.1 million. Double-digit growth of MST offset a decline in loose-leaf chewing tobacco. For the second quarter, total Stoker’s Products segment volume increased 0.7 percent while price/mix increased 6.6 percent.
For the quarter, the Stoker’s Products segment gross profit increased 10.4 percent to $20 million. Gross margin expanded 160 basis points to 55.4 percent due to MST pricing gains.
“Stoker’s continues to benefit from strong market share gains in both the MST and loose-leaf chewing tobacco categories as its value proposition continues to resonate with consumers,” continued Purdy.
August 2, 2023
China’s Boton Group Divests 51% Stake in Bubblemon

Kate Wang / Credit: RELX
China Boton has sold its Bubblemon Vape Brand to the founder of RELX vaping products, Kate Wang.
According to an announcement, the company has signed a sale agreement with the Han Holding SPV.
Han Holding is an investment holding limited company registered under the laws of the British Virgin Islands and a wholly-owned subsidiary of Sunnyheart Inc.
Sunnyheart Inc. is a limited liability company registered under the laws of the Cayman Islands, primarily engaged in the sale of e-cigarettes.
According to the directors, based on the information provided by Sunnyheart Inc., the ultimate beneficial owner of Sunnyheart Inc. is Wang Ying (also known as Kate Wang, CEO and founder of Relx Technology), who holds 50 percent voting rights of Sunnyheart Inc. and is the sole director of Sunnyheart Inc.
Upon completion of the transaction, the buyer and Han Holding SPV will respectively hold 81 percent and 19 percent of the target company’s equity.
After the reorganization, Boton Holding SPV and Han Holding SPV will respectively hold 51 percent and 49 percent of the target company’s equity, making the Korean target company a wholly-owned subsidiary of the target company, according to 2FIRSTS.
China Boton is an investment holding limited company registered in the Cayman Islands, mainly engaged in the research and development, production, trading, and sale of extracts, essences, and spices. The company is also involved in the design and manufacture of high-quality e-cigarettes and related products.
August 1, 2023
New Categories Boost BAT Half-Year Revenues

Photo: BAT
British American Tobacco reported revenue of £13.44 billion ($17.35 billion) in the first six months of 2023, up 4.4 percent over the figure recorded in the comparable 2022 period. Growth was driven by the company’s “New Categories” segment. Revenue from noncombustible products now accounts for 16.6 percent of group revenue, up 180 base points (bps) versus fiscal year 2022.
BAT’s Vuse and Velo brands enjoyed strong revenue growth, and New Categories’ financial delivery significantly improved, contributing a £201 million increase to group profit as losses reduced.
Reported profit from operations was up 61.4 percent (with reported operating margin up 1,560 bps to 44.2 percent). Adjusted profit was up 3.6 percent at constant exchange rates. Adjusted operating margin was up 40 bps to 44.3 percent.
“Having been in my new role for 10 weeks, I’m pleased with the resilient performance of BAT in the first half of 2023 and the renewed sense of energy across the organization,” said BAT Tadeu Marroco, who assumed the top job in May. “It is a challenging external environment. High inflation and slower global growth are impacting consumers and business. Yet our revenue, profit from operations and earnings are all up.
“We are making great progress in New Categories. Revenues are up by 29 percent, and we are now close to break[ing] even, with consumers of noncombustible products up by 1.5 million versus FY 2022. While it’s encouraging to see continued good performance in vapor and modern oral, we recognize more work is required in heated tobacco.
“I remain confident that New Categories will deliver a positive contribution in 2024. However, we do not expect contribution growth to be linear, as levels of investment will align with the phasing of our big innovation platforms.
“While more focus is required in the U.S., our sequential performance improvement in the critical premium U.S. combustibles business since January 2023 is encouraging.
July 26, 2023