Why did SWAG's operating profit plummet in Q3 2024?

Stran & Company (SWAG) experienced a significant decline in operating income in Q3 2024, with a reported operating income of -$2.12 million. The company's earnings call and financial results reveal several factors contributing to this decline: 1. **Increased Operating Expenses**: Stran & Company faced a 17.6% rise in operating expenses, amounting to approximately $30.7 million. This increase was primarily driven by the integration of Gander Group assets and the adoption of NetSuite ERP systems. The integration of Gander Group, which contributed significantly to revenue growth, came with initial expenses. The company's expansion and integration efforts, including the implementation of NetSuite ERP, significantly boosted operational efficiency but initially strained financials. 2. **Stran Segment Sales Decline**: Sales from the Stran segment fell to approximately $72.7 million from $76 million in the previous year, largely due to reduced spending from both new and existing clients. This decline in segment sales directly impacted the overall gross profit and operating income. In summary, the operating profit of Stran & Company, Inc. (SWAG) declined in Q3 2024 primarily due to increased operating expenses and a decline in sales from its Stran segment. These factors combined to create a challenging financial period for the company despite its strategic growth initiatives.