Stran & Company, Inc. (NASDAQ:SWAG) reported higher second-quarter revenue and continued improvement in first-half profitability, supported by growth in its core Stran segment and stronger margins at its Stran Loyalty Solutions, or SLS, business.
Revenue for the three months ended June 30 rose 2.4% to $33.4 million from $32.6 million a year earlier. Gross profit increased 1.6% to $10 million, while gross margin was 30%, compared with 30.3% in the prior-year quarter. The company posted operating income of $86,000 and net income of $309,000, compared with net income of $643,000 a year earlier. Quarterly EBITDA was $551,000, down from $929,000.
Core segment growth offsets lower SLS revenue
Stran segment sales increased 6.9% year over year to $23.3 million in the second quarter, from $21.8 million. Shape said growth reflected a combination of expanded spending by existing clients, new customer wins, additional sales representatives and business-development initiatives. The company said it serves more than 30 Fortune 500 customers.
SLS revenue declined to $10.1 million from $10.8 million in the year-ago quarter. Management attributed the decline to the timing, size and mix of customer programs, particularly in casino and gaming, as well as lower spending by existing clients during the first half.
Despite the revenue decline, SLS gross margin expanded to 24.3% from 21% in the second quarter. The segment’s gross profit rose to $2.5 million from $2.3 million, according to the figures provided on the call, while operating expenses declined to $2 million from $2.1 million. Chief Financial Officer David Browner cited improved customer mix, cost management and lower tariffs as drivers of the segment’s gross-profit improvement.
During the question-and-answer session, Shape said the company views an SLS gross margin in the mid-to-high 20% range as a longer-term target. He said approximately 26% is a realistic expectation, given the competitive nature of the market and the larger order sizes in the segment.
First-half earnings improve
For the first six months of 2026, Stran reported revenue of $64.6 million, up 5.4% from $61.3 million in the prior-year period. Gross profit increased 7.2% to $19.7 million, and gross margin rose to 30.4% from 30%.
- Operating income was $731,000, compared with an operating loss of $140,000 a year earlier.
- Net income increased to $1.1 million from $250,000.
- EBITDA more than doubled to $1.6 million from $728,000.
- Stran segment revenue increased to $46.7 million from $42.7 million.
- SLS revenue declined to $17.9 million from $18.6 million, while its gross profit increased to $4.7 million from $4 million.
Total operating expenses rose 2.4% to $18.9 million for the first half, but fell as a percentage of sales to 29.3% from 30.2%. Browner said the Stran segment’s higher expenses reflected increased headcount and employee-related costs, sales-related costs and investment in STRAN Digital Solutions. SLS expenses declined due to a small headcount reduction and lower sales-related costs.
As of June 30, the company held $12.6 million in cash, cash equivalents and investments.
Enterprise contracts and casino expansion
Management highlighted several new business wins announced during the quarter. In May, the company disclosed multiple consumer-retail contracts, including a three-year uniform program with a U.S. grocery retailer that is expected to generate six figures in annual revenue. The company also won additional uniform and promotional-product orders from regional grocery operations.
In June, Stran announced a contract with a U.S. provider of construction materials and systems. The engagement, which includes branded merchandise, promotional campaigns and end-to-end program management, is expected to generate nearly seven figures in annual revenue.
Shape said these relationships support the company’s “land and expand” strategy, in which initial uniform or promotional-product work can lead to broader branded-merchandise, fulfillment, marketing and loyalty programs.
The company also added Kevin Lewis as a contracted sales representative in the casino and gaming market. Shape said Lewis brings industry experience, relationships and an existing customer portfolio, and that the addition complements the improving profitability of SLS.
Technology, capital allocation and outlook
Shape said the company is continuing to invest in STRAN Digital Solutions, which is designed to offer customers additional functionality and make it easier to access the company’s services. He characterized the investment as measured rather than substantial, saying management aims for the platform to be cost-neutral initially and profitable over time.
“We’re leaning into it, but we’re being conservative with the amount that we’re investing,” Shape said, adding that the company wants to avoid shifting too much attention away from its core business.
Stran resumed share repurchases during the second quarter, buying and retiring approximately 131,000 shares for about $272,000. Since the program began, the company has repurchased approximately 2.3 million shares for $4.2 million, at a weighted average price of $1.81 per share.
Management said it will balance repurchases with organic-growth investments and potential acquisitions. Shape also noted that the company’s public warrants, with an exercise price of about $4.81 per share, are scheduled to expire in the fourth quarter of 2026.
Looking ahead, Shape said the company’s priorities are to drive profitable growth, deepen customer relationships, convert its business pipeline into revenue and maintain discipline in investment and capital allocation.
About Stran & Company, Inc. (NASDAQ:SWAG)
Stran & Co, Inc engages in the provision of promotional marketing and branded merchandise services. It offers promotional product, custom manufacturing, custom packaging, warehousing, and program management. The company was founded by Andrew Shape and Andrew Stranberg in 1994 and is headquartered in Quincy, MA.
