An unexpected change in leadership and a cut in the top end of a guidance item were the two key negative factors driving Turning Point Brands (TPB -10.02%) stock down on Monday. Investors aggressively sold the niche tobacco company's equity, leaving it with a 10% decline at the end of the day.

Turning to a new chief

Turning Point, the company behind the chewing tobacco brand Beech-Nut and Zig-Zag rolling papers, announced that CEO Graham Purdy is vacating his position. He is to be succeeded by David Glazek, the current executive chairman of the company's board of directors.

Image source: Getty Images.

Turning Point said that Purdy is departing the company due to personal reasons that require immediate attention; it did not elaborate. It added that the move did not result from any disagreement between Purdy and Turning Point.

The CEO change will be effective next Thursday, Oct. 1.

The company also updated its full-year guidance. It reduced the high end of its earnings before interest, taxes, depreciation, and amortization (EBITDA) forecast to $70 million from $80 million; previously, it had expected to earn as much as $90 million.

Meanwhile, it maintained both the gross and net sales estimates for its No. 1 product category, oral tobacco products. This is still expected to come in at a gross amount of $330 million to $350 million, with net sales landing at $260 million to $270 million.

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NYSE: TPB

Turning Point Brands

Premium Feature

Moneyball Superscore

69/100

Today's Change

(-10.02%) $-6.83

Current Price

$61.31

Key Data Points

Market Cap

$1.4BMarket cap calculated using publicly traded shares outstanding only. Does not include unlisted, private, or dual-class non-traded shares. Implied market cap may vary.

Day's Range

$58.65 - $65.25

52wk Range

$58.65 - $146.90

Volume

1.2M

Avg Vol

336.3K

Gross Margin

59.16%

Dividend Yield

0.57%

A tough business

Prior to these two pieces of news, Turning Point hadn't been doing well as a stock. Towards the end of last month, a giant rival, Philip Morris International, won U.S. Food and Drug Administration (FDA) authorization for an affiliated company to market a set of its Zyn Ultra moist oral nicotine pouches.

So the combination of a sudden, unexpected CEO departure and a top-end EBITDA guidance cut is raising investor worry levels for Turning Point. I wouldn't necessarily panic about either development, but given the many challenges of the tobacco (and derivatives) business, I wouldn't consider this stock a buy either, even at Monday's knocked-down price.