What happened

Shares of Turning Point Brands (TPB -1.89%) were tumbling nearly 17% lower in morning trading Tuesday after the cigarette alternative products maker posted third-quarter results that fell short of analyst expectations on the top line, but beat the consensus estimates on the bottom line.

What might have hurt most was Turning Point offering underwhelming guidance for the fourth quarter and slashing its outlook for the full year.

Moist snuff tobacco

Image source: Getty Images.

So what

Turning Point posted sales of $109.9 million for the quarter, short of the $112.9 million Wall Street was anticipating, though management said it was "within our expectations" as its core business grew 11% year over year.

Earnings, though, beat estimates, coming in at an adjusted rate of $0.72 per share compared to the consensus $0.70 per share.

Turning Point Brands specializes in selling rolling papers under its Zig-Zag brand, which account for 38% of total sales and enjoyed double-digit growth. Stoker's moist snuff tobacco (MST) and chewing tobacco, on the other hand, represent 28% of sales, but suffered divergent outcomes as chewing tobacco plunged while MST jumped.

Its New Gen segment of vapor products dropped 3% from last year (they account for 34% of sales), as it continues to navigate the Food & Drug Administration's (FDA) regulatory maze for marketing approval. After receiving a marketing denial order from the FDA in September, which would have forced it to pull its product from store shelves, it appealed the decision. The agency admitted it erred and said the products would undergo further review. 

Now what

Turning Point Brands was going up against difficult comparisons to the year-ago period, but the regulatory environment and supply chain constraints are pressuring the smoking alternatives company.