Cimpress (asi/162149), a Top 40 promo distributor that’s parent company of Vistaprint and former Top 40 firm National Pen, increased sales but recorded a loss during the first quarter of its 2023 fiscal year.

Global company revenue across all divisions was up 7% in the three-month period ended Sept. 30 to $703.4 million.

Robert Keane, Cimpress

Still, the Dundalk, Ireland-headquartered company tallied a net loss of about $25.4 million – worse than the prior year’s Q1 when Cimpress’ loss was about $6.7 million. The firm posted a loss from operations of almost $18 million. Loss per diluted share was -$0.97.

Promotional products distributor National Pen and Vistaprint, a web-based seller of promo and print products, helped drive Cimpress’ topline gain. Vistaprint’s Q1 revenue was $369.4 million, up about $20 million from the prior year’s first quarter. Meanwhile, National Pen tallied sales of nearly $81.7 million – a jump of about $12 million.

Still, the revenue gains weren’t enough to get Cimpress into the black on earnings.

CEO Robert Keane explained that a gross profit increase of $7.1 million driven by revenue growth was more than offset by a planned $20.7 million increase in advertising expenses and an $11.3 million increase in compensation expenses tied primarily to the impact of hiring in the company’s Vista division throughout fiscal year 2022, as well as “inflation-adjusted merit increases across all businesses made at the start of fiscal year 2023.”

Keane further explained the loss: “We incurred $2.4 million of expense related to the continued optimization of our leased office footprint that will generate approximately $4 million of annualized savings. We also incurred $1.8 million of restructuring expense.”

Cimpress also reported a sales gain and an earnings loss for its full-year fiscal 2022, when revenue rose 12% year over year to nearly $2.9 billion. The loss, however, was $54.3 million, or -$2.08 per share.

Still, looking ahead, Keane is confident about the future.

“Our customer demand picture remains strong,” Keane said. “Cimpress has never had a stronger combination of talent, technology and data capabilities, and scale advantages upon which to deliver value to customers and our long-term shareholders. Fiscal year 2023 is a year in which we must execute well with all that we have built, and Q1 was a good start.”

Based on estimated 2021 North American promo product revenue of $464 million, Cimpress ranked fifth on Counselor’s most recent list of the largest distributors in the industry.