Stran & Company, Inc. Q2 2026 Earnings Report

Stran & Company, Inc. EPS Results

• Actual EPS: $0.02
• Consensus EPS: $0.02
• Beat/Miss: Met Expectations
• One Year Ago EPS: N/A

Stran & Company, Inc. Revenue Results

• Actual Revenue: $33.36 million
• Expected Revenue: $11.24 million
• Beat/Miss: Beat by +$22.12 million
• YoY Revenue Growth: N/A

Stran & Company, Inc. Announcement Details

• Quarter: Q2 2026
• Date: 8/11/2026
• Time: After Market Closes
• Conference Call Date: Wednesday, August 12, 2026
• Conference Call Time: 10:00AM ET

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.

Stran & Company, Inc. Q2 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: First-half profitability improved substantially: revenue rose 5.4% to $64.6 million, operating income reached $731,000 versus a $140,000 loss, net income increased to $1.1 million, and EBITDA more than doubled to $1.6 million.
• Neutral Sentiment: The core Stran segment remained the primary growth engine, with second-quarter revenue up 6.9% to $23.3 million on higher existing-customer spending and new business, while total company revenue increased 2.4% to $33.4 million.
• Positive Sentiment: SLS profitability improved despite lower revenue tied to variable casino and gaming program timing; its gross margin expanded to 24.3% from 21%, and segment operating income nearly doubled year over year. Management expects a longer-term margin range in the mid-to-high 20s, with roughly 26% viewed as more realistic.
• Positive Sentiment: The company announced enterprise wins including a three-year grocery uniform program and a construction-materials contract expected to generate nearly seven figures in annual revenue, while adding casino-industry sales expertise and moving up to No. 21 on the ASI Counselor distributor ranking.
• Neutral Sentiment: Stran resumed share repurchases, buying approximately 131,000 shares for $272,000, and ended the quarter with $12.6 million in cash and investments. Management also expects the expiration of its $4.81-exercise-price public warrants in the fourth quarter of 2026 to remove a potential stock overhang, while continuing cautious investment in STRAN Digital Solutions and selective acquisitions.

Presentation

[Operator]

Good morning, everyone, and welcome to Stran & Company's second quarter 2026 earnings call. At this time, all participants are in a listen-only mode, and a question and answer session will follow the formal presentation. If anyone should require operator assistance during this conference, please press star zero on your phone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Alexandra Schilt, Investor Relations at Crescendo Communications. Over to you.

[Alexandra Schilt, Investor Relations at Crescendo Communications]

Good morning, and thank you for joining Stran & Company's 2026 second quarter financial results and business update conference call. With us today are Andy Shape, Chief Executive Officer, and David Browner, Chief Financial Officer. Yesterday, we issued a press release detailing our results, which is available on our website at ir.stran.com. Before we begin, please note that today's remarks may include forward-looking statements that involve risks and uncertainties as described in our SEC filings. With that, I'll turn the call over to Andy Shape. Please go ahead, Andy.

[Andy Shape, CEO at Stran & Company]

Thank you, Alexandra. Good morning everyone, and thank you for joining us today. The second quarter was a strong period for Stran. We continue to execute on the strategy we've been building over the past several years, and the results are showing up in our numbers. We are deepening relationships with large enterprise customers, winning new business across attractive verticals, strengthening our position in casino and gaming, and continuing to invest in technology and the infrastructure necessary to support a larger and more scalable organization. Our opportunity extends well beyond traditional promotional products. Our goal is to become an increasingly important strategic partner to our customers, helping them manage complex branded merchandise, loyalty, incentive, e-commerce, and fulfillment programs through an integrated platform. During the quarter, we made progress against that vision while navigating the normal variability that comes with the timing, size, and mix of large customer programs.

[Andy Shape, CEO at Stran & Company]

That progress is increasingly visible in our financial performance, beginning with continued top-line revenue growth in the second quarter. For the quarter, revenue increased 2.4% to $33.4 million, compared with $32.6 million in the prior-year-period. Gross profit increased to $10 million, with a gross margin of 30%. We remain profitable, generating operating income of $86,000 and net income of $309,000. Our core Stran business continued to be the primary driver of top-line growth, with that segment revenue increasing 6.9% year-over-year, reflecting higher spending from existing clients as well as new customer base business. We're also encouraged by what we saw at Stran Loyalty Solutions, our business segment consisting of the Gander Group business. While SLS revenue declined year-over-year, the casino and gaming business can experience variability between quarters based on the timing and size of individual customer programs and orders.

[Andy Shape, CEO at Stran & Company]

More importantly, the profitability of the business improved meaningfully during the quarter. SLS generated higher gross profit, expanded gross margin to 24.3% from 21%, and nearly doubled segment operating income year-over-year. When we step back and look at the first six months of 2026, the underlying progress becomes even more clear. The first half represents the strongest six-month period in Stran's history as a public company. First half revenue increased 5.4% to $64.6 million, gross profit increased 7.2% to $19.7 million, and gross margin improved to 30.4%. Most importantly, we generated $731,000 of operating income compared with an operating loss of $140,000 last year. The net income increased to $1.1 million from $250,000. EBITDA for the first half more than doubled to $1.6 million from $728,000 a year ago.

[Andy Shape, CEO at Stran & Company]

Taken together, the second quarter and first half results demonstrate continued progress across the areas that matter most to us, growing our core business, improving the profitability of SLS, strengthening the earnings profile of the company, and investing in the platform to support our next stage of growth. Beyond the financial results, we had a productive quarter on the business development front. We continued to win new enterprise relationships, expand into attractive verticals, and build the kind of long-term programmatic business that drives durable revenue. In May, we announced multiple new contract wins within the consumer retail market, including a three-year uniform program with a leading U.S. grocer retailer that is expected to generate six figures in annual revenue, along with additional uniform and promotional product orders from regional grocery operations. These wins demonstrate the value of our broader approach.

[Andy Shape, CEO at Stran & Company]

Establishing an initial relationship through a uniform or promotional program gives us an opportunity to execute, deepen that relationship, and potentially expand into additional brand and merchandise fulfillment and marketing programs over time. That is central to our land and expand strategy. Win the relationship, deliver at a high level, and then increase the breadth of service that we provide as the relationship develops. We continued that momentum in June when we announced a new contract with a leading U.S. provider of construction material and systems serving commercial and residential markets. That engagement is expected to generate nearly seven figures in annual revenue and includes branded merchandise, promotional campaigns, and end-to-end program management. This win is significant not only for its expected initial contribution, but because it demonstrates our ability to apply the Stran platform across new industries and large enterprise organizations.

[Andy Shape, CEO at Stran & Company]

As with many of our relationships, our objective is to establish a strong initial program and then identify opportunities to broaden the relationship over time. We also continue to strengthen our position in the casino and gaming market, which remains an important area of opportunity for Stran. Toward the end of the quarter, we announced the addition of an industry veteran, Kevin Lewis, as a contracted sales representative. Kevin brings extensive experience and relationships across casino and gaming industry, along with an existing customer portfolio. This is particularly compelling when viewed alongside the improving financial performance of Stran Loyalty Solutions. As we discussed earlier, SLS delivered significantly stronger margins and profitability during both second quarter and first half of the year. Our objective is now to build on that stronger operating foundation by expanding the business we can bring through the platform.

[Andy Shape, CEO at Stran & Company]

We continue to see favorable trends across the promotional products and loyalty industries as companies place greater emphasis on customer engagement, employee retention, and brand activation. At the same time, larger organizations increasingly want integrated partners that can combine technology, creative execution, fulfillment, and program management at scale. That shift plays directly to Stran's strengths and is reflected in our continued advances within the industry. Most recently, Stran moved up two positions to number 21 on the 2026 ASI Counselor Top 40 Distributor list, a key industry benchmark based on verified North American promotional products revenue. That recognition reflects the scale we have built, the strength of our enterprise relationships, and our ability to continue gaining share in a large and fragmented market. Acquisitions also remain an important part of our growth strategy, but we will continue to be disciplined.

[Andy Shape, CEO at Stran & Company]

We are focused on opportunities that expand our capabilities, add attractive customer relationships, strengthen key verticals, and create meaningful long-term value. Our balance sheet gives us the flexibility to be patient and pursue the right opportunities at the right time. As we enter the second half of the year, we are operating from a stronger foundation with a growing core business, improving profitability at SLS, new enterprise wins, and an expanding pipeline. Our focus is on converting that momentum into sustainable revenue growth, stronger profitability, and increasing cash generation. Capital allocation remains part of that strategy. During the second quarter, we resumed our share repurchase program, purchasing and retiring approximately 131,000 shares for approximately $272,000. Since program inception, the company has repurchased a total of approximately 2.3 million shares for approximately $4.2 million at a weighted average of $1.81 per share.

[Andy Shape, CEO at Stran & Company]

We will continue to balance repurchase with investments in the organic growth and strategic acquisitions, always with the objective of creating long-term shareholder value. I also want to highlight that our public warrants, which have an exercise price of approximately $4.81 per share, are scheduled to expire in the fourth quarter of 2026. As the warrants expire, we expect the overhang on our stock to be removed, which should simplify our capital structure and present a cleaner equity story for current and prospective investors. Stran has multiple paths to grow. Our focus is clear. Execute with discipline, continue improving the economics of the business, and translate that business into greater value for our shareholders. I'll now turn the call over to our CFO, David Browner, for a more detailed review of our financial results. David, please go ahead.

[David Browner, CFO at Stran & Company]

Thank you, Andy, and good morning, everyone. I'm pleased to provide a detailed overview of our financial performance for the three and six months ended June 30th, 2026. For our three months results, total sales increased 2.4% to $33.4 million for the three months ended June 30th, 2026, from $32.6 million for the prior-year-period. Sales by our Stran segment increased to $23.3 million for the three months ended June 30th, 2026, from $21.8 million for the prior-year-period. Sales by our SLS segment decreased to $10.1 million for the three months ended June 30th, 2026, from $10.8 million for the prior-year-period. Total gross profit increased 1.6% to $10 million, or 30% of sales, for the three months ended June 30th, 2026, from $9.9 million, or 30.3% of sales, for the prior-year-period.

[David Browner, CFO at Stran & Company]

The increase in the dollar amount of total gross profit was primarily attributable to customer mix and effective cost management. Gross profit for our Stran segment remained consistent with prior-year-period of $7.6 million for the three months ended June 30th, 2026 in the prior year. For the Stran segment, the slight decrease in the dollar amount of gross profit was due to the customer mix. Gross profit for our SLS segment increased to $2.5 million for the three months ended June 30th, 2026, or $2.6 million for the prior-year-period. For the SLS segment, the increase in the dollar amount of gross profit was primarily attributable to an improved customer mix, effective cost management, and lower tariffs. Total operating expenses increased 4.9% to $9.9 million for the three months ended June 30th, 2026, from $9.5 million for the prior-year-period.

[David Browner, CFO at Stran & Company]

As percentage of sales, total operating expenses increased to 29.8% for the three months ended June 30th, 2026, from 29.1% for the prior year. Operating expenses of our Stran segment increased to $6.9 million for the three months ended June 30th, 2026, from $6.5 million for the prior-year-period. As a percentage of sales, operating expenses of our Stran segment decreased to 29.8% for the three months ended June 30th, 2026, from 30% for the prior-year-period. For the Stran segment, the increase in the dollar amount of operating expenses was primarily due to higher sales-related costs and our investment in the STRAN Digital Solutions to provide enhanced functionality and offerings to scale client programs. Operating expenses for our SLS segment decreased to $2 million for the three months ended June 30th, 2026, from $2.1 million for the prior-year-period.

[David Browner, CFO at Stran & Company]

As a percentage of sales, operating expenses of our SLS segment increased to 19.9% for the three months ended June 30th, 2026, from 19% for the prior-year-period. For the SLS segment, the decrease in the dollar amount of operating expense was primarily attributable to a small reduction in headcount and lower sales-related costs. Operating expenses for other, consisting of unallocated corporate costs, including salaries of corporate officers, audit-related fees, board of directors' compensation, and other stock-related charges. Such costs increased by $106,000-$995,000 for the three months ended June 30th, 2026, from $889,000 for the prior-year-period. The increase was primarily due to higher legal and accounting expenses. Net income for the three months ended June 30th, 2026, was $309,000 compared to a net income of $643,000 for the prior-year-period. This change was primarily due to an increase in gross profit.

[David Browner, CFO at Stran & Company]

EBITDA for the three months ended June 30th, 2026, was $551,000 compared to an EBITDA of $929,000 for the prior-year-period. For six months results, total sales increased 5.4% to $64.6 million for the six months ended June 30th, 2026, from $61.3 million for the prior-year-period. Sales of our Stran segment increased to $46.7 million for the six months ended June 30th, 2026, from $42.7 million for the prior-year-period. For the Stran segment, the increase in sales was primarily due to higher spending from existing clients as well as business from new customers. Sales by our SLS segment decreased to $17.9 million for the six months ended June 30th, 2026, from $18.6 million for the prior-year-period. For the SLS segment, the decrease in sales was primarily attributable to a lower spend from existing clients.

[David Browner, CFO at Stran & Company]

Total gross profit increased 7.2% to $19.7 million, or 30.4% of sales for the six months ended June 30, 2026, from $18.4 million or 30% of sales for the prior-year-period. The increase in dollars amount of total gross profit was primarily attributable to the customer mix and effective cost management. Gross profit of the Stran segment increased to $15 million for the six months ended June 30, 2026, from $14.4 million for the prior-year-period. For the Stran segment, the increase in the dollar amount of gross profit was due to an increase in sales of $4 million, which was partially offset by an increase of cost of sales of $3.4 million. Gross profit of the SLS segment increased to $4.7 million for the six months ended June 30, 2026, from $4 million for the prior-year-period.

[David Browner, CFO at Stran & Company]

For the SLS segment, the increase in the dollar amount of gross profit was primarily attributable to an improved customer mix and effective cost management. Total operating expenses increased 2.4% to $18.9 million for the six months ended June 30, 2026, from $18.5 million for the prior-year-period. As a percentage of sales, total operating expenses decreased to 29.3% for the six months ended June 30, 2026, from 30.2% for the prior-year-period. Operating expenses of the Stran segment increased to $13.2 million for the six months ended June 30, 2026, from $12.2 million for the prior-year-period. As a percentage of sales, operating expenses of our Stran segment decreased to 28.2% for the six months ended June 30, 2026, from 28.5% for the prior year.

[David Browner, CFO at Stran & Company]

For the Stran segment, the increase in dollar amount of operating expenses was primarily due to an increased headcount in employee-related costs, higher sales-related costs, and our investment in STRAN Digital Solutions to provide enhanced functionality and offering to scale client programs. Operating expenses of our SLS segment decreased to $3.7 million for the six months ended June 30, 2026, from $4.2 million for the prior-year-period. As a percentage of sales, operating expenses of our SLS segment decreased to 20.8% for the six months ended June 30, 2026, from 22.6% for the prior-year-period. For the SLS segment, the decrease in the dollar amount of operating expenses was primarily attributable to a small reduction in headcount and lower sales-related costs. Operating expenses for other consists of unallocated corporate costs, including salaries for corporate officers, audit-related fees board of director compensation, and other stock-related charges.

[David Browner, CFO at Stran & Company]

Such charges decreased by $78,000 to $2.05 million for the six months ended June 30, 2026, from $2.13 million for the prior-year-period. The decrease was primarily due to lower legal and accounting expenses. Net income for the six months ended June 30, 2026, was $1.1 million, compared to a net income of $250,000 for the prior-year-period. This change was primarily due to an increase in gross profit. EBITDA for the six months ended June 30, 2026, was $1.6 million, compared to an EBITDA of $728,000 for the prior-year-period. As of June 30, 2026, we had $12.6 million in cash and cash equivalents and investments. Now I'll turn the call back to Andy.

[Andy Shape, CEO at Stran & Company]

Thank you, David. At this time, we will open up to questions. Operator, please open the call for questions.

[Operator]

Thank you very much. We will now be conducting our question and answer session. If you would like to ask a question, please press star one on your phone keypad now. A confirmation tone will indicate that your line is in the queue. You may press star two if you would like to remove your question from the queue. For anyone using speaker equipment, it might be necessary to pick up your handset before you press the keys. Please wait a moment whilst we poll for questions. Thank you. Our first question is coming from Greg Womack, who is a private investor. Greg, your line is live.

[Greg Womack, Shareholder at Private Investor]

Right. Yeah, thanks. Congratulations on the good quarter.

[Andy Shape, CEO at Stran & Company]

Thanks, Greg.

[Greg Womack, Shareholder at Private Investor]

I was hoping we can get some more details on the primary drivers of revenue growth in the quarter. Was it between pricing, new logos, or deeper penetration at existing programs?

[Andy Shape, CEO at Stran & Company]

It was really a combination of all of those things. I mean, that is our growth strategy to try to We've got a great roster of clients already. We have over 30 Fortune 500 customers, so we try to expand and go deeper with them. It was a combination of that, as well as some new business that we've also gotten through the addition of some additional sales reps, some new business development efforts, and some new clients. Really, that's just a combination of getting more from our existing client base and finding new clients, which is what we continue to do going forward as well.

[Greg Womack, Shareholder at Private Investor]

Awesome. The second question too. I've seen that one of your goals last year was to improve the margin at the SLS segment. It looks like you've done that. So you had, I think, 28% and then a slight step back to 24% this quarter. Which of those do you think is closer to the long-run run rate of that segment? Do you think there's more improvement that can be had?

[Andy Shape, CEO at Stran & Company]

Probably right in the middle of the two of them is really where we're looking, probably in that mid to high 20s. Just because it's a very competitive market. It's a little bit more competitive. Our orders are a little bit larger in that segment, so we have to be a little bit more tighter on our prices. But price isn't always the driving factor. Quality, value that we deliver for those clients and what we deliver for them is much more relevant to them than pricing alone. So, I think we can get it closer to that 28%, but probably in the 26% is probably more realistic is what we're looking at.

[Greg Womack, Shareholder at Private Investor]

All right. That helps. Thank you.

[Andy Shape, CEO at Stran & Company]

Yep. Thank you for the questions.

[Operator]

Thank you very much. Just a reminder there. If there are any further questions, you can still join the queue by pressing *1 on your phone keypad now. Just wait and see if anyone else comes in. Yeah, we've got a question in from Edward Reilly of Minot Light. Edward, your line is live.

[Edward Reilly, Analyst at Minot Light Capital Partners]

Hey, guys, just one for me. With the increase in G&A here sequentially and year-over-year, it seems like you're really leaning into STRAN Digital Solutions a bit more. What's giving you more confidence to invest more money and time within this platform?

[Andy Shape, CEO at Stran & Company]

Yeah. So for us, we're investing that's somewhat of a low risk, high reward opportunity. We're investing into it, but not significantly. Although we are investing into it, we're not investing seven figures into it. We see that offers much more stickiness for that for our customers, that we're offering them an easier way to use our platform to accomplish more services that we provide to them, which make it easier to do business with them. That's really, at the end of the day, what our technology offers is making it easier for them to do more job functions or more service functions for them, whether that's additional print. Additional loyalty, or additional services that we can provide to them. We are leaning into that from a sales and marketing standpoint, but not necessarily from a technology standpoint.

[Andy Shape, CEO at Stran & Company]

We've established and built out the platform fairly cost-effectively, and now we're seeing some results from a few select customers, existing customers, and then we're rolling it out now also to try to attract additional new customers as well. We're leaning into it, but we're being conservative with the amount that we're investing into it because we want to really make sure that we see results of that, not go out and try to spend more than we're making. We're trying to have it be, in the beginning, cost neutral and then eventually very profitable over time. Hopefully that answers your question. But we're still very excited about it, but we're just being very conservative in the investment and the time that we put into it, since we want to also make sure that we don't cannibalize our core business by concentrating too much on that.

[Andy Shape, CEO at Stran & Company]

It's a fine balance that we're doing, but I'm happy with where we're going with it, and I'm excited about the future of that.

[Edward Reilly, Analyst at Minot Light Capital Partners]

All right, great. Thanks Andy.

[Andy Shape, CEO at Stran & Company]

Yep.

[Operator]

Thank you very much. We appear to have reached the end of our question and answer session. I will now turn the call back over to Andy for any closing comments.

[Andy Shape, CEO at Stran & Company]

Yeah, thank you, everyone for the questions. Thank you, operator, and thanks to everyone else for joining us today. Our second quarter and first half results demonstrate continued progress we're making across the business. Our Stran segment continues to grow. SLS is delivering stronger profitability. We're expanding our enterprise relationships across several attractive markets. As we move through the second half of the year, our priorities remain pretty clear. Continue to drive profitable growth, deepen customer relationships, convert our pipeline into new business, and remain disciplined in how we invest and allocate our capital. The platform we have built gives us multiple avenues to create value as we continue to scale. We are confident in the direction of the business and excited about the opportunities ahead.

[Andy Shape, CEO at Stran & Company]

I want to thank our employees for their continued dedication, our customers for their trust and partnership, and our shareholders for their ongoing support. We look forward to building on this progress and keeping you updated in the quarters ahead. That concludes the call, and thank you, everybody.

[Operator]

Thank you very much. This does conclude today's conference call. You may disconnect your phone lines at this time, and have a wonderful day. We thank you for your participation.

Participants

Analysts

• Alexandra Schilt, Investor Relations at Crescendo Communications
• Andy Shape, CEO at Stran & Company
• David Browner, CFO at Stran & Company
• Greg Womack, Shareholder at Private Investor
• Edward Reilly, Analyst at Minot Light Capital Partners