Stran & Company, Inc. (NASDAQ:SWAG) reported higher third-quarter sales and a return to profitability as improved customer mix, cost management and tariff refunds helped lift gross margins.
Revenue rose 8.2% to $28.1 million for the three months ended Sept. 30, 2026, from $26 million a year earlier. Net income was $35,000, compared with a net loss of $1.2 million in the prior-year period. Chief Executive Officer Andy Shape said the company had been profitable in each of the first three quarters of 2026.
“Our objective is not growth at any cost,” Shape said. “It is growth that contributes to stronger margins, greater profitability, and long-term value creation.”
Loyalty Business Improves
Stran Loyalty Solutions, which serves the casino and gaming market, generated third-quarter sales of $9.6 million, up from $8.3 million a year earlier. Its gross profit increased to $3 million from $1.6 million, while operating income was approximately $687,000, compared with an operating loss in the prior-year period, according to Shape.
Browner said the segment’s gross profit improvement reflected a better customer mix, cost management, lower tariffs and a tariff refund. Shape said the company is seeking to expand existing customer relationships, develop new partnerships and increase the segment’s profitability.
Sales in the Stran segment rose to $18.5 million from $17.6 million, while segment gross profit increased to $6.4 million from $5.5 million. Browner attributed the gross profit increase to customer mix.
Companywide operating expenses rose 7.5% to $9.5 million, though they declined slightly as a percentage of sales to 33.9% from 34.1%. Third-quarter EBITDA, a non-GAAP measure, was $260,000, compared with negative EBITDA of $1.1 million a year earlier.
Technology and Acquisition Plans
Shape said Stran is pursuing larger customer programs that serve multiple departments and locations, rather than competing solely for individual promotional product orders. The company provides services including branded merchandise, employee recognition, loyalty programs and fulfillment.
Stran is also deploying artificial intelligence to support employees and automate work in areas including order entry, quoting, artwork preparation, inventory management and customer service, Shape said. The company is building AI-enabled features into its customer platform and expects technology to help it manage more complex programs without a proportional increase in costs.
Acquisitions remain another priority. Shape said the company is evaluating opportunities both in promotional products and in complementary marketing services, while emphasizing a selective approach focused on strategic value and potential operating efficiencies.
Warrants and Share Repurchases
Approximately 4.3 million publicly traded warrants issued in connection with Stran’s 2021 initial public offering expired unexercised on Nov. 9, Shape said. The remaining approximately 5.7 million warrants are scheduled to expire by Dec. 10.
The roughly 10.1 million warrants outstanding at the end of the third quarter represented more than half of the company’s shares outstanding, Shape said. He added that the November expiration did not result in additional shares being issued or affect operating results.
During the third quarter, Stran repurchased and retired approximately 109,000 shares for about $208,000. Approximately $5.6 million remained available under its repurchase authorization at quarter-end. Since the program began, the company has bought back approximately 2.4 million shares for $4.4 million, at a weighted average price of $1.81 per share.
Year-to-Date Results
For the first nine months of 2026, sales rose 6.3% to $92.7 million from $87.3 million a year earlier. Net income was $1.1 million, compared with a $1 million loss, while EBITDA was $1.8 million, compared with negative EBITDA of $384,000.
Gross margin for the nine-month period rose to 31.3% from 29.1%. Browner said the company had $12.6 million in cash, cash equivalents and investments as of Sept. 30.
About Stran & Company, Inc. (NASDAQ:SWAG)
Stran & Company, Inc. is a promotional products and marketing services company headquartered in Quincy, Massachusetts. The company helps businesses and organizations strengthen their brands through the design, sourcing, production and distribution of branded merchandise and related marketing materials. Its offerings include apparel, branded gifts, promotional products, packaging, print materials, awards and recognition items, and other customized products. Stran also provides creative services, online company stores, inventory management, warehousing, fulfillment and distribution services to support clients’ marketing and promotional programs.
