In a full-year financial report released this week, publicly traded Top 40 distributor 4imprint (asi/197045) said 2023 was a record-breaker.

The largest distributorship by revenue in the North American promotional products industry reported that it increased total global sales by 16% year over year in 2023 to $1.326 billion – an all-time annual high for the firm.

While headquartered in the United Kingdom, 4imprint’s main operations and the vast majority of its business are in North America, with its main facility being in Oshkosh, WI. In the North American geographic market, 4imprint’s sales also rose 16% on an annual basis last year, tallying $1.3 billion – another company record.

4imprint and HALO Branded Solutions (asi/356000) made history last year by being the first distributorships to surpass $1 billion in sales (based on 2022 numbers) on Counselor’s annual Top 40 distributors list.

“Building on the momentum generated by a healthy post-pandemic rebound that began in 2022, [4imprint] delivered another very strong financial performance in 2023,” said Chairman Paul Moody.

4imprint’s profitability improved, too. Operating profit rose 32% to $136.2 million, while profit-after-tax registered $106.2 million, up about $26 million from 2022. Both basic and diluted earnings per share for 2023 were about $3.77.

The distributor, which operates an e-commerce business model, ended 2023 with cash and bank deposits of $104.5 million, an increase from $86.8 million at the end of 2022.

“This remarkable performance reflects the strength of our strategy in driving continued market share growth,” CEO Kevin Lyons-Tarr, a member of Counselor’s Power 50 list of promo’s most influential people, said in the financial report. “As ever, this growth was underpinned by the outstanding efforts of our team members and the strength of the relationships we have with our supplier partners.”

A Rise in Orders, But Slower Sales Acceleration

An increase in total orders, which included generating more business with current customers, helped drive success for 4imprint, executives said. Total orders jumped 12% year over year to 2,090,000. Existing customers placed 1,561,000 of those orders – a rise of 14%. Average order values were up 1%.

The company said that in 2023 it acquired 311,000 new customers, who placed a total of 529,000 orders. Those measurables were up 1% and 2% – well below the prior year when new customer acquisition grew 17% on an annual basis.

“As well as being a function of much tougher comparatives in the second half of 2022, the relative slow-down in new customer acquisition also correlates clearly with the softening demand patterns in the industry,” Lyons-Tarr said.

ASI Research shows that #promproducts distributors overcame many challenges to set a new industry sales record in 2023. This report is a deep-dive into the numbers, nuances & stories that made 2023 & a look forward to 2024. https://t.co/kHnQmN08Ev @asicentral @NKucsma_ASI

— Chris Ruvo (@ChrisR_ASI) January 26, 2024

To that point: Despite 4imprint sales being up double digits, percentage growth slowed considerably in 2023 compared to 2022, when the firm’s growth rate was around 45%.

In 2022, 4imprint and the promo industry more broadly experienced especially robust growth rates amid a strong bounce back from COVID-era depressed sales. That made for tougher year-over-year comparatives for 4imprint and the industry in 2023 in terms of matching or surpassing 2022’s sales acceleration.

Complicating things further was that market demand weakened in the latter half of 2023 amid recession fears and other factors that impacted investment in promo – and 4imprint was not immune.

The Distributor Quarterly Sales Survey from ASI Research showed, for instance, that North American promo distributors’ sales were essentially flat in the fourth quarter of 2023, while for the year they rose, on average, by 1.2% to $26.1 billion. That was still good enough to be a new industry record, but well down from the 11.4% growth of 2022. 4imprint’s 16% sales increase outpaced the industry average, and the firm expects sales to rise again in 2024.

“Trading results in the first two months of 2024 have been in line with both the board’s expectations and consensus forecasts,” said Moody. “We are confident that we will continue to take market share.”

Beyond the Numbers

In its financial report, 4imprint pointed to operational highlights.

The company noted that it’s expanding its Oshkosh distribution center from about 300,000 square feet to 450,000 square feet. Construction on the $20 million project is underway. 4imprint aims for the additional space to be operational by the fourth quarter of 2024. The expansion is primarily aimed at supporting apparel-related business.

A new screen-printing facility in Appleton, WI, went live in April 2023 to support the expansion of the apparel business; 4imprint launched a second shift there in the first quarter of 2024.

$20 Million
Approximate price of 4imprint’s expansion project at its main facility in Oshkosh, WI.

4imprint also asserted that it made progress on its sustainability and corporate social responsibility initiatives. The firm said it maintained and renewed its CarbonNeutral business certification and worked on energy and waste reduction efforts, with a goal of advancing clean energy initiatives and reducing reliance on carbon offsets.

Additionally, 4imprint’s existing solar panel array in Oshkosh will be supplemented and extended in capacity as part of the expansion project at the Oshkosh distribution center. The company said it has also expanded its sustainable products range, with more than 15,000 such items reportedly on offer.

4imprint is experimenting with new marketing channels to help build its brand. “Most recently we have had initial success in our testing into streaming TV, which will now become part of our brand marketing investment,” Lyons-Tarr said.

Based on reported 2022 North American promotional product revenue of $1.12 billion, 4imprint ranked first on Counselor’s most recent list of the largest distributors in the industry.