Category: Financial

Smoore International Issues 2023 Profits Warning

Smoore International Holdings issued a profit warning for the six months ended June 30, 2023.
The company’s board of directors expects the group’s comprehensive income for the period to be between RMB717.3 million ($100.1 million) and RMB792.8 million, representing a decrease of between 42.7 percent and 48.2 percent from the income reported for the comparable period in 2022.
The adjusted net profit will be approximately RMB741.4 million to RMB816.9 million, representing a decrease of approximately 43.1 percent to 48.4 percent from the prior-year period.
Smoore attributed the decline to a decrease in revenue of 9.4 percent. Revenue from the Mainland China market for the period dropped approximately 96.3 percent, and its proportion to total revenue decreased from approximately 30 percent in the 2022 period to approximately 1.2 percent in the most recent six months.
Although the revenue from Mainland China in the second quarter of 2023 has significantly increased compared with the first quarter of 2023, it is still far below the same period last year.
During the period, the group’s revenue from overseas markets was approximately RMB5.06 billion, representing a steady growth of approximately 28 percent year-on-year. Among them, the revenue from the U.S. market was approximately RMB2.22 billion, representing a year-on-year increase of approximately 26.9 percent.
With the strengthening of supervision and enforcement of noncompliant products, compliant products are expected to gain more room for sustainable growth in the U.S. market.
Revenue from Europe and other markets was approximately RMB2.85 billion, representing a year-on-year increase of approximately 28.8 percent. The group launched disposable products with a better experience under the compliance framework in this market, which were well received by clients and users, and the revenue from this market continued to grow.
The increase in revenue from overseas were insufficient to offset the declines in Mainland China.
July 20, 2023
Supreme Shares Soar After ElfBar Distro Agreement

Credit: 88Vape
UK vaping giant Supreme saw its shares rise shares five percent yesterday after the company announced it is now the “master distributor” for UK e-cigarette brands, although the company has reported weak annual profits.
The firm has been chosen as the master distributor for two leading UK vaping brands, ElfBar and Lost Mary, which it will supply to major UK retailers such as Tesco, Morrisons and WHSmith Travel.
The London-listed company expects the partnership to generate revenues of £25m to £30m ($38 million) over the next fiscal year ending March 2024, according to media reports.
This comes amid a political crackdown on vape products – especially for those under-age.
Sandy Chadha, CEO of Supreme, said the “sizeable” appointment will allow the group to “fully leverage its unique technical, regulatory, compliance and quality assurance capabilities within the vaping sector.”
“We have seen a hugely positive response from both established and new retailers who view Supreme as an ideal partner to supply these products across the UK,” Chadha added.
Supreme says their strong market presence, distribution network, and compliance capabilities provide ElfBar and Lost Mary with a “readymade blueprint” distribution strategy.
The company will report its sales performance separately from the existing vaping category, which includes their own 88Vape brand.
It comes as Supreme posted a record performance in their vaping division this morning, with nearly doubled revenues up to £76.1m from £43.6m last year, and an £8.6m increase in gross profit.
£76.1 million (FY22: £43.6 million) and increasing gross profit to £28.1 million (FY22: £19.5 million)
In 2023 they ramped up investment in M&A and capital expenditures by £7.5m to “support future growth”.
“As we look to the future, we remain committed to expanding our product set, both organically and via acquisition,” Chadha commented:
July 6, 2023
Kaival Brands Reports Flat Quarterly Revenues

Photo: wichayada
Kaival Brands Innovations Group reported revenues of $3 million in the second quarter of fiscal 2023, down from $3.1 million in the comparable 2022 quarter. Gross loss was $100,000 compared with a gross profit of $400,000 in the prior-year period.
While sales were slightly down versus the prior year quarter due to customer credits, discounts and rebates, Kaival believes that continued U.S. Food and Drug Administration enforcement of noncompliant electronic nicotine-delivery system products has allowed the company to position its Bidi Stick as a compliant alternative subject to FDA enforcement discretion. The company believes this should also help in securing new orders for the Bidi Stick.
“We remain excited and confident in the future of Kaival Brands,” said Eric Mosser, president and CEO of Kaival Brands, in a statement. “Over the past four months, we signed new broker and distribution agreements for our core Bidi Stick distribution business, focusing on partners that share our vision of regulatory compliance and youth access prevention. We believe we have positioned ourselves for increased sales in the second half of the year.”
In addition to its quarterly results, Kaival announced the renewed distribution of its Bidi Stick in Circle K convenience stores. “As of this week, we have activated over 1,000 new Circle K locations, with the goal of ramping up to 5,000 this year,” said Mosser.
The company also announced the initial shipment of Bidi Sticks to over 900 Kwik Trip and Mapco locations.
June 15, 2023
Ispire Technology Banks $24 Million in 3Q 2023
Ispire Technology Inc. released its financial results for the third quarter of the fiscal year 2023 ended March 31. The China-based company reported revenue of $24.1 million, an increase of 26.9 percent compared to $19.0 million in Q3 2022.
Q3 FY 2023 Financial Highlights

Regarding its revenue increase to $24.1 million, tobacco vaping products contributed $16.5 million and cannabis vaping products contributed $7.6 million to revenue during the third quarter of 2023;
Gross profit increased 51.9% to $4.5 million as compared to $3.0 million in the same period of 2022;
Gross margin increased to 18.7% as compared to 15.7% in the same period of 2022.
Total operating expenses increased 106.2% to $8.0 million as compared to $3.9 million in the same period of 2022; and
Net loss of $3.1 million as compared to net loss of $1.0 million in the same period of 2022.
“We are very pleased with our financial results during our third quarter. Revenue growth was a robust 26.9 percent while gross profit grew 51.9 percent due to a favorable product mix and the realization of economies of scale on higher sales volume,” said Michael Wang, Ispire CFO. “We look forward to a strong finish to the fiscal year with a projected sequential revenue increase for cannabis vaping products of between 58% and 98% during our fourth quarter.”
Liquidity and capital resources: As of March 31, 2023, Ispire had $24.0 million in cash and cash equivalents and $5.2 million in working capital, according to a press release.
Initial public offering: In April 2023, Ispire completed its initial public offering, selling 3.1 million shares of common stock at $7.00 per share, including the overallotment option.
The stock began trading on NASDAQ on April 4, 2023. The offering generated gross proceeds of approximately $21.7 million, with net proceeds of $18.5 million after deducting expenses and underwriting discounts.
May 22, 2023
RLX Reeling From Illicit Flavored Vape Products

Creit: RELX
RLX Technology reported net revenues of RMB188.9 million ($27.5 million) for the first quarter of 2023, down from RMB1.71 billion in the same period of 2022. Gross margin was 24.2 percent during the quarter, compared with 38.3 percent in the comparable 2022 period. GAAP net loss was RMB56.3 million, compared with GAAP net income of RMB687.1 million in the same period of 2022. Non-GAAP net income totaled RMB183.6 million, down from RMB361.8 million in the same period of 2022.
RLX Technology attributed its struggles to fierce competition from illicit products. “We experienced an incredibly challenging first quarter as illegal-flavored products caused users’ slow shift to products that meet the national standards and drove our total revenues down to RMB188.9 million. Our gross margin declined as we incurred the full effect of the new excise tax in the first quarter,” said RLX Technology Chief Financial Officer Chao Lu in a statement.
“We are pleased that market conditions have improved, following the regulators’ strict actions to combat illegal products since March 2023. As a result, our sales are showing signs of recovery. Looking ahead, we will continue improving our operational efficiency and believe our profitability will gradually recover. Our resilient business model and solid cash position will support us as we navigate the market dynamics, enabling us to deliver sustainable value to our stakeholders as the industry regains momentum.”
According to RLX Technology co-founder, CEO and Board Chair Ying (Kate) Wang, the company remained focused on optimizing its product offerings under the new regulatory framework during the first quarter.
“While we strive to develop diversified, new, approved products that cater to users’ various demands, the prevalence of illegal products has posed near-term challenges to our sales and disrupted the recovery pace of the industry as a whole.
“The increasing efforts put forth by the regulators to crack down on illegal products have been encouraging, and we are hopeful that these will be effective in supporting the creation of fair and orderly market conditions, prompting a return to sustainable growth for law-abiding companies such as RLX Technology.
“If illegal products can be pushed out of the market, we believe adult users will gradually adapt to products that meet national standards. As a trusted e-vapor brand for adult smokers, we remain committed to providing compliant, superior products that meet our users’ needs as we continue exploring growth opportunities in the evolving industry.”

May 17, 2023
Regulations Hurt RLX Technology’s 2022 Revenues

Kate Wang / Credit: RELX
RLX Technology’s 2022 financial performance was heavily impacted by new industry regulations and e-cigarette taxes, along with Covid-related disruptions, in China.
The company reported net revenues of RMB340 million ($49.3 million) in the fourth quarter of 2022, down from RMB1.9 billion in the same period of 2021. Its GAAP net loss was RMB225.1 million, compared with GAAP net income of RMB494.4 million in the comparable 2021 quarter.
For the full fiscal year, net revenues declined to RMB5.33 billion in 2022 from RMB8.52 billion in 2021. U.S. GAAP net income was RMB1.41 billion, down from RMB2.03 billion in the prior year.
“2022 was a year full of unprecedented challenges,” said RLX Technology co-founder, chairperson and CEO Ying Wang in a statement. “A combination of Covid-related disruptions and the introduction of a substantial package of industry regulations and policy updates throughout the year impacted the e-vapor sector and our operations.
“We retained our core strategy in this volatile operating environment while proactively adapting our business to the new regulations. In the fourth quarter, we continued to invest in R&D and product innovation and development, offering superior products to adult smokers. We believe our core competencies will enable us to attract continued support from users.
“Looking ahead, given the benefits of the clearer regulatory framework and China’s reopening, we remain confident in the long-term growth of our industry. We are well-positioned to adapt to these shifting market forces and capture new opportunities while further deepening our commitment to honoring our social responsibilities.”
RLX Technology was particularly affected by the vast wave of coronavirus infections as China suddenly relaxed its zero-Covid policy toward the end of 2022. In addition, its gross margin in the fourth quarter suffered as a result of the imposition on Nov. 1, 2022, of a 36 percent excise tax on e-cigarettes in China.
“Despite the headwinds, we strove to improve operational efficiency to mitigate the adverse impact on our business,” said RLX Technology Chief Financial Officer Chao Lu. “As a result, we maintained a healthy level of profitability during 2022. We believe our company’s resilience will enable us to overcome near-term obstacles, and we remain dedicated to creating long-term sustainable value for our stakeholders.”
March 13, 2023
Net Sales Down 6.8% at Turning Point Brands

Turning Point Brands reported consolidated net sales of $103.4 billion the fourth quarter of 2022, down 1.8 percent from the comparable 2021 quarter. Gross profit decreased 1.5 percent to $49.6 million. Net sales for the Zig-Zag and Stoker products increased 0.9 percent and 2.6 percent, respectively, while sales of new-generation products declined by 11.1 percent.
For the full year, consolidated net sales decreased by 6.8 percent to $415 million. Gross profit was down 5.6 percent to $205 million. Net sales for Zig-Zag and Stoker’s products increased 7.9 percent and 5.3 percent, respectively, while sales of new generation declined by 35.2 percent
“The fourth quarter operating results finished in-line with our expectations with solid execution across our segments,” said TPB President and CEO Graham Purdy in a statement.
“The Zig-Zag segment grew during the quarter despite the impact of a previously disclosed pull-forward in the prior quarter, benefitting from continued market share gains and the contribution from a full quarter of CLIPPER lighters. We are pleased with the ongoing roll-out and strong channel receptivity to the world’s No. 1 reusable lighter. Stoker’s MST experienced strong share gains as consumer trade-downs to value accelerated, consistent with the current inflationary and economic backdrop.
“The challenging regulatory environment continues to negatively affect the NewGen segment which was down materially vs. 2021, but with declines moderating in the back half of the year. In addition to returning capital to our shareholders through share repurchases, we opportunistically purchased $10 million notional of our convertible notes during the fourth quarter while maintaining a strong cash balance.
”Over the last few months since taking on the CEO role, my primary objective has been to re-direct our focus and energy towards driving organic long-term growth. This starts with allocating resources to products, initiatives, and channels best positioned towards this goal. Our organization is now better aligned towards capitalizing on the opportunities in front of us and we look forward to delivering against our long-term plans going forward.”
February 25, 2023
BAT’s Next-Gen Tobacco Products Profits Growing

Credit: Dilok
British American Tobacco says that it expects its next-generation tobacco products division to be profitable earlier than previously anticipated, but its share price was down as diluted earnings per share declined.
Total revenue for BAT is set to come to £27.7 billion for 2022, up 7.7 percent from 2021.
Its “new categories” arm – made up of vaping products, heated tobacco products and nicotine pouches contributed £2.9 billion of 2022 revenues, which was up by 40.9 percent, reports the Evening Standard.
CEO Jack Bowles said the division was now expected to turn a profit in 2024, one year earlier than previously thought.
“Our new category business delivered strong volume, revenue and market share growth and has become a significant contributor to the group’s financial delivery,” he said. “In 2022, we invested more than £2 billion in new categories to drive long-term sustainable growth, while making excellent progress in reducing operating losses by 62 percent.”
Adjusted operating profit for BAT as a whole was in line with expectations at £12.4 billion.
However, BAT shares are down 4.5 percent so far today.
The top-selling Vuse electronic cigarette of BAT subsidiary R.J. Reynolds Vapor Co. continued to expand the market-share gap with Juul in both monthly and yearly comparisons.
BAT, the owner of the Irish business PJ Carroll, is also seeking to bring a judicial review against a decision by the European Union to ban flavored heated tobacco products.
February 9, 2023
RLX Technology Reports Revenue Down From 2021
RLX Technology reported net revenues of RMB1.04 billion ($146.8 million) in the third quarter of 2022, down from RMB1.68 billion in the same period of 2021. The decrease was due primarily to the suspension of store expansions and the discontinuation of older products during the transition to the new national standards, according to the Chinese vapor product manufacturer.
Gross profit was RMB522 million for the quarter, compared with RMB656 million in the same period of 2021. Gross margin was 50 percent, compared with 39.1 percent in the prior-year period. RLX Technology attributed the improvement to a favorable change in channel mix. Because the company gradually terminated partnerships with distributors who did not obtain wholesale licenses during the transition period, its sales contribution from retail stores increased as RLX began to directly provide products to these retail stores. The company benefited also from a decrease in direct cost related to promotional activities.
“During the third quarter of 2022, we remained dedicated to preparing for a smooth transition to the new national standards, which came into full effect on Oct. 1, 2022. Specifically, we wound down shipments of our older products and gradually switched to the National Transaction Platform on a regional basis. We have now achieved full geographical coverage nationwide,” said Ying Wang, co-founder, chairperson of the board of directors and CEO of RLX Technology, in a statement.
Third Quarter 2022 Financial Highlights

Net revenues were RMB1.044.4 billion ($146.8 million), compared with RMB1.676.7 billion in the same period of 2021.

Gross margin was 50.0%, compared with 39.1% in the same period of 2021.

U.S. GAAP net income was RMB505.2 million ($71.0 million), compared with RMB976.4 million in the same period of 2021.

Non-GAAP net incomewas RMB328.6 million ($46.2 million), compared with RMB452.7 million in the same period of 2021.

“In addition to our efforts to proactively adapt to the new standards, we have focused on fulfilling our social responsibilities, which we see as one of our core competitive advantages. We recently published our annual corporate social responsibility report, summarizing our endeavors with respect to market responsibility, R&D investment, environmental protection, employee career development, and corporate governance. I am proud to share that our latest S&P CSA ESG score ranked ahead of 67 percent of our global peers, representing a powerful commendation of our commitment to sustainability and ESG best practices.”
“We delivered net revenues of approximately RMB1 billion in the third quarter, recording a sequential decrease mainly due to the discontinuation of older products during the transition to the new national standards, as well as the second quarter’s high comparison basis mainly attributable to frontloading of sales in anticipation of the discontinuation of older products. We remain confident that our diversified portfolio will continue to satisfy adult smokers’ needs and that our sales will gradually recover,” said Chao Lu, chief financial officer of RLX Technology.
“Meanwhile, our continuous efforts to improve operational efficiency are proving effective, evidenced by a 30.9 percent quarter-over-quarter decrease in non-GAAP operating expenses. However, our profitability in the coming quarters will be adversely affected by the application of 36 percent consumption tax to e-cigarettes manufacturers since November 1, 2022. Cost control measures will remain at the forefront of our strategic initiatives as we navigate the evolving regulatory environment while maintaining our sustainable long-term growth.”
November 16, 2022
BAT Invests Nearly £50 Million in Charlotte’s Web

Photo: bukhta79
BAT is investing £48.2 million ($57.4 million) in Charlotte’s Web Holdings. Based in Colorado, USA, and listed on the Toronto Stock Exchange, Charlotte’s Web offers cannabinoid extract wellness products.
“The appeal of Charlotte’s Web is clear to us: a wide portfolio of high-quality products, strong brand equity, an extensive retail presence and robust B2C e-commerce platform serving a loyal U.S. consumer base, and a track record of in-depth scientific research,” said BAT Chief Growth Officer Kingsley Wheaton in a statement. “Our investment in Charlotte’s Web represents another step for BAT in our exploration beyond tobacco and nicotine,” Wheaton said.
Last month, Charlotte’s Web became the first CBD company allowed to use the moniker “Official CBD of MLB.” Major League Baseball (MLB) said in June that it would allow teams to enter sponsorships with CBD marketers.
Describing its relationship with MLB as a “multiyear, strategic partnership,” Charlotte’s Web issued 6,119,121 shares of its common stock to the sports organization—worth an estimated $4.4 million at the time.
“This investment will provide Charlotte’s Web with funding that we anticipate will help unlock deeper and broader research and development that is key to our continued innovation, global footprint and the advancement of our intellectual property portfolio,” said Jacques Tortoroli, CEO of Charlotte’s Web.
November 15, 2022