LO Blu Remains No.2 Followed by Logic and MO - E-cig c-store $ sales maintained strong. Though pricing trends have been negative for 12 consecutive periods now, we believe that is at least partially due to difficulty in capturing SKUs given the rapidly evolving vapor category and proliferation of vapors/tanks/mods (VTM) and refills which tend to have a lower retail price/refill. We are encouraged by the strong 25.6% category $ sales growth, LO retained the #2 $ share position at 22.9% share while Logic was #3 - up to 18.6% share, MO down sequentially to 6% and NJOY at 5.3%.

 

In terms of unit share, RAI continues to be #1 with 44.1%, share followed by Logic (17.8%), LO (15%) and MO (6.6%). We continue to be somewhat skeptical of RAI's 1 44.1% unit shr given Vuse is in 70K outlets vs. 100K for blu, though we note Vuse's eq. pricing ($3.98) was 17% below category avg. ($4.80) which likely explains the fast growth. LO continues to lead the take-home channel with 38.1% $ share. Other leading firms in XAOC were Mistic (20.7% share), ECIG (13.7% share) and NJOY (6.5% share). E-cig category $ sales were $51.7M this period in c-stores and $8.9M in XAOC (take home), implying ~$900M annual sales in Nielsen-tracked channels (up from $750M a few periods ago) and we believe vapor sales in non-Nielsen tracked channels (such as vape shops) plus online sales (~$500M) suggest the vapor category is over $2.5B (see our chart on page 2). Importantly, we note that VTMs are under-represented in Nielsen but are growing 2x faster than the vapor category.