Why did FGI's operating profit plummet in Q4 2024 despite revenue growth?

FGI Industries experienced a decline in operating profit in Q4 2024 despite a significant increase in revenue due to several factors:

1. **Increased Operating Expenses**: The company's gross profit decreased by 3.2% year-over-year, and the gross margin declined by 460 basis points. This was primarily due to customer marketing support and costs related to new business and associated promotional expenses in Bath Furniture. These increased expenses ate into the profit margin, leading to a lower operating profit.
2. **Strategic Investments**: FGI has been investing strategically in its brands, products, and channels, which has led to increased revenue growth. However, these investments have also resulted in higher operating expenses, impacting the operating profit. For instance, the company has continued to invest in its kitchen cabinet business and distribution for its Canada business. While these investments are crucial for long-term growth, they can temporarily strain financial performance.

In conclusion, FGI's operating profit decline in Q4 2024 was likely a result of increased operating expenses and strategic investments, despite revenue growth.