SGC

Image source: The Motley Fool. Tuesday, Aug. 4, 2026 at 8 a.m. ET Chief Executive Officer - Michael Benstock President and Chief Financial Officer - Michael Koempel President of the company's Branded Products segment - Jake Himelstein Operator: Good morning, and welcome to the Superior Group of Companies' Second Quarter 2026 Conference Call. With us today are Michael Benstock, Chief Executive Officer; and Mike Koempel, President and Chief Financial Officer. In addition, Jake Himelstein, President of the company's Branded Products segment, will join today's Q&A session. As a reminder, this conference call is being recorded. This call may contain forward-looking statements regarding the company's plans, initiatives and strategies and the anticipated financial performance of the company, including, but not limited to, sales and profitability. Such statements are based upon management's current expectations, projections, estimates and assumptions. Words such as expect, believe, anticipate, think, outlook, hope and variations of such words and similar expressions identify such forward-looking statements. Forward-looking statements involve known and unknown risks and uncertainties that may cause future results to differ materially from those suggested by the forward-looking statements. Such risks and uncertainties are further disclosed in the company's periodic filings with the Securities and Exchange Commission, including, but not limited to, the company's most recent annual report on Form 10-K and the quarterly reports on Form 10-Q. Shareholders, potential investors and other readers are urged to consider these factors carefully in evaluating the forward-looking statements made herein and are cautioned not to place undue reliance on such forward-looking statements. The company does not undertake to update the forward-looking statements, except as required by law. And now I'll turn the call over to Michael Benstock. Michael Benstock: Thank you, operator, and thanks, everyone, for joining us. We are proud to have delivered a strong quarter with consolidated revenue up 3% year-over-year, a 160 basis point improvement in SG&A, EBITDA up 27% to $7.7 million and adjusted diluted EPS of $0.21, more than doubling the second quarter of 2025. Excluding the noncash trade name impairment that Mike will discuss and reflects the progress we're making on mix margin and earnings power, our results highlight the benefit of our diversified business as we continue to navigate a choppy demand environment. Our outlook remains favorable given our long-standing and solid customer relationships, the strength of their brands and our ability to support them with advanced technology, a flexible supply chain and stellar service. Turning to our segments. I'll start with Branded Products, our largest business. Revenue grew 6% year-over-year, driven primarily by higher volumes with existing customers. We drove gross margin expansion along with SG&A improvement as a percent of sales. Taken together, this led to a 25% increase in Branded Products EBITDA. As we look ahead, we believe our growing backlog and ongoing investments in sales talent, marketing and technology will drive continued long-term growth. Our Healthcare Apparel revenue declined 4% and gross margin decreased by 260 basis points, largely due to a noncash inventory write-down tied to our recent strategic decision to accelerate the shift to a more focused product offering. While we were able to reduce SG&A, SG&A as a percent of sales increased slightly on the lower revenue base and segment EBITDA declined by $1 million year-over-year. The quarter was undeniably challenging, but we view the shorter-term margin pressure and the transition under new leadership as necessary steps towards stronger, more sustainable margins and a more efficient use of working capital over time. Finally, in Contact Centers, as expected, revenue was down 4% year-over-year, but improved sequentially for the second consecutive quarter. The year-over-year decline reflects client attrition in 2025 whereas the more recent sequential improvement is driven by a net increase in agents year-to-date and stronger conversion from our significantly larger pipeline of new business than we had a year ago. Gross margin was lower due to higher human capital costs as we prepare for stronger growth ahead, which was more than offset by improved SG&A, leading to stronger EBITDA for the quarter. To sum it up, we had a strong quarter, and we see clear opportunities ahead for both growth and margin expansion. Our solid balance sheet and growing operating cash flow give us the flexibility to invest strategically across each of our segments. I'll now hand it over to Mike to walk through the financial details before we open the call up for questions. Michael Koempel: Thank you, Michael, and welcome again, everyone, to the call. Second quarter consolidated revenue was $148 million, resulting in a 3% year-over-year increase for the second straight quarter. The revenue increase was driven by Branded Products, which increased 6% to $98 million from volume increases with existing customers. Revenue for Healthcare Apparel was $27 million, down 4% compared to the prior year due to tariff refunds. And lastly, revenue from our Contact Center segment was $23 million, also off 4%, but sequentially improved from the first quarter's 8% year-over-year decline. Our second quarter gross margin of 38% was down 40 basis points compared to the year ago quarter. Branded Products drove gross margin of 36.5%, up nearly a full percentage point from the year ago quarter, driven by customer mix. The Healthcare Apparel gross margin was 32.9% due to a $2.6 million incremental noncash inventory write-down, partially offset by a $1.8 million net tariff refund benefit. The contact centers gross margin for the second quarter of 50.9% was down 170 basis points, as Michael previously described. Second quarter SG&A as a percent of sales of 34.7% improved 160 basis points from last year, driven by expense leverage in Branded Products on a 6% sales increase and an improvement in credit loss expense in the Branded Products and Contact Centers segments. Putting this all together, our second quarter EBITDA of $7.7 million improved from $6.1 million in the year ago period. Moving further down the income statement, our net interest expense of $981,000 improved from $1.25 million in the second quarter of 2025 due to a lower weighted average interest rate and a decrease in average debt outstanding. In terms of bottom line performance, second quarter net income was $1.2 million or $0.08 per diluted share. In the second quarter of 2026, the company recognized a pretax noncash impairment charge related to trade names in the Healthcare Apparel segment of $2.6 million or $2 million net of tax, translating to $0.13 per diluted share. The charge does not affect the company's cash position or cash flow from operating activities. On an adjusted basis, which excludes the impairment charge, second quarter net income was $3.1 million or $0.21 per diluted share, up significantly from net income of $1.6 million or $0.10 per diluted share for the year ago quarter. Turning to our balance sheet. We ended the second quarter with $23 million of cash and equivalents after generating first half operating cash flow of $18 million, and we remain well positioned to strategically invest in growth opportunities while returning capital to shareholders through both our attractive dividend yield and opportunistic share repurchases. Specifically, we paid $2.2 million in dividends during the second quarter, and we have approximately $9 million available under our share repurchase authorization. Turning to our full year outlook. We continue to expect 2026 net sales of $572 million to $585 million and look for adjusted diluted EPS of $0.54 to $0.66, well above the prior year's diluted EPS of $0.46. Once again, our guidance reflects a back half weighted cadence again this year, both top and bottom line. And now, operator, if you could please open the lines, Michael, Jake and I would be happy to take questions. Operator: [Operator Instructions] Our first question comes from Michael Kupinski with NOBLE Capital Markets. Michael Kupinski: I was wondering if you can just maybe talk a little bit about Chris Hine's operational changes at -- in the Healthcare Apparel segment. And when should those initiatives really start to begin producing some measurable revenue growth and maybe margin improvement? I was just wondering if you could just kind of outline for us and maybe give us some color on some of the changes that he's making there. Michael Koempel: Michael, this is Mike. Thanks for joining the call. Chris, obviously, being just about 3 or 4 months into the business, but obviously spent a lot of time just getting integrated into the business and understanding the specific operations of the business. I'd say where he spent a lot of his time up to this point is really in the product and assortment part of the business. So from an operating perspective, a lot around how we're looking at collections, the merchandising, the sourcing associated with that. And the reason why that is, as you know, that's the long lead time in the business. So it's important to get to that first because given the long lead time, it takes time to have the impact on the business. So he's really started with the product and beginning to formulate what he thinks is the appropriate assortment architecture going forward, which, as we said in our prepared remarks, is getting to what I would call a more focused assortment, so going, so to speak, narrow and deeper. So that's where he's really spent his time. You can see in the quarter, there was some margin pressure associated with beginning to make that assortment transition. We would expect some shorter-term margin pressure to continue through the balance of this year, not to the extent that you're seeing in the second quarter, but I would anticipate still some margin pressure on a year-over-year basis and then begin to see improvements in 2027. Michael Kupinski: Got you. On the Contact Centers, the EBITDA was up strongly. Can you kind of just give us a little bit more color on the margin improvement and what maybe additional efficiencies remain available there? And then also your -- it seems like you're quite positive about the new business pipeline. Are those just recent client wins and the attrition is coming down? When do you expect maybe the segment to return to year-over-year revenue growth? Is that -- are you still kind of thinking that it's going to be in like the second half, maybe the third quarter? Michael Koempel: Yes. On the Contact Centers side, the margin improvement in the second quarter continues to reflect improved SG&A. That's in part because last year, we're lapping a credit loss reserve associated with a former customer last year, but it also continues to reflect the cost reductions and efficiencies that the business put in place. So what's really good is we continue to see that we're essentially sustaining those reductions in SG&A, which is driving an improvement in the EBITDA margin. What we said at the beginning of the year, and we're seeing it through the results is that we expect the Contact Center segment to sequentially improve in the top line, which will drive EBITDA margin improvement as we go quarter-to-quarter, again, because of the SG&A leverage that we're getting. What you see in the second quarter is gross margins were down a little bit. There were some initial investments we're making to onboard new customers this quarter that won't repeat itself. So we'd expect the margin -- the gross margin rate to improve in the back half. So I think between continued sequential improvement in sales, continuing to manage expenses and gross margins rebounding again, we expect the EBITDA margin of that business to continue to improve as we go into the back half. The sales growth is really, Michael, a combination of we've got some nice expansion with existing customers. So we've added some seats with existing customers, and we have an increase in the conversion of new customers the first 6 months this year as compared to the first 6 months last year. So it's still taking. The decision-making is still slow. But despite that, we were able to convert more customers this year. And again, our expectation is that will continue through the balance of the year, which again would drive incremental sales growth into Q3 and then in Q4. Michael Kupinski: Great. And if I could slip one more in on Branded Products. Obviously, you've had growth now for 3 consecutive quarters. I was just wondering if -- and you indicated that you have the strongest pipeline that you've seen for a while. You indicated this quarter that it was driven mostly by existing customers. And I was just wondering if you can talk a little bit about how you see the growth for the rest of the year? And then on the margins were obviously structurally higher. It looked like 11.4% margins, that was well above what we had in 2024. I was just wondering if you could talk a little bit about what's driving the margin improvement there? And then if you can just talk a little bit about the customer mix and just how things are shaping up for the balance of the year? Jake Himelstein: Michael, this is Jake Himelstein. I'll try to unpack those questions. And if I miss any, please let me know. But we'll start with the margins. Margins were largely driven by favorable customer mix. We also had some improved sourcing on some larger programs that we're able to deliver. And overall resulted in really strong gross margins, which ultimately dropped into our EBITDA margins. You mentioned pipeline. Pipeline is strong across the board, both with existing customers and new customers. We mentioned in the past couple of quarters that pipeline has continued to be really strong. We've seen some of that pipeline start to convert into programs that we've won that are delivering revenue both now and are going to continue to roll out into the rest of '26 and even into '27. So even though something we've mentioned before, decision-making is slower on RFPs, a big pipeline results in wins even with slower RFP decisions. So the pipeline continues to be strong even when we win programs or programs fall out of the pipeline, we're replenishing them with new opportunities, which has been really great. And yes, you're right. On the current quarter, much of the growth has been volume driven from existing customers, expanding current programs and increasing volumes with existing clients, which has been great. And then we're layering in some of those wins. So we're excited about where things stand. We have a really strong pipeline coming into the back half of the year. So yes, seeing those results are really exciting for us, and we're looking forward to the rest of the year. Michael Kupinski: Congratulations. Operator: The next question comes from Keegan Cox with D.A. Davidson. Keegan Tierney Cox: I just wanted to ask, you delivered a nice 2Q beat. I was just wondering if you can kind of walk through any of the assumptions embedded in your guidance. I guess, what leads you to keep the guidance unchanged despite a solid beat on top line and on EPS? Michael Koempel: Sure. The guidance where we're reflecting, obviously, on the upper end of guidance, Keegan, we're reflecting, again, the back half weighted growth. And that would really be based on the fact that our Healthcare business, which has become a little bit more cyclical heavier in the third quarter. So it just reflects the fact that we've had typically a larger second half in Healthcare. And then also, I mentioned in Mike's questioning that we expect sequential improvement in the Contact Centers business, which again would drive incremental growth in the back half. I think we also recognize, again, touching on a prior question that we are going through a transition on the -- in the Healthcare business. And so again, you see some margin pressure here in the second quarter we expect some margin pressure in the back half of the year. To some extent, that will depend, obviously, on the demand in the market as we -- as again, as we make changes in our assortment. So I think the guidance reflects the fact that, again, there could be some variability associated with that transition as Chris is making changes in the business. And so we felt halfway into the year with still a lot of business to go that it was just appropriate to hold guidance. We're still obviously very optimistic about the business, and we'll certainly relook at guidance as we get through the third quarter. Keegan Tierney Cox: Got it. And then a follow-up for me is on Branded Products. I know we've kind of talked about some competitor weakness there before. Does it make sense to kind of go make an acquisition there now given the business is kind of growing in that healthy mid-single-digit growth range. I guess, are you still gaining share in the space organically is kind of the real question there? Jake Himelstein: Yes, Keegan, we're gaining share organically, and we'll continue to do that. Whether we make an acquisition or not, we're going to aggressively pursue organic growth, both winning new clients and growing existing clients. That said, we're always on the hunt for acquisitions. And if a good one shows up, lands on our doorstep, we're certainly open to doing it. As Michael likes to say, we have to kiss a lot of frogs to find the right company, but we are constantly in conversation with our competition, trying to find the next great target. And if we do, we'll certainly look at it. Michael Benstock: I'll add some color to that. Keegan, I'll add some color that. Mostly what we're looking for are businesses that help expand our ability to service customers. Things we're not doing for customers, and there's a lot of areas in the promotional side of our business that we're not doing. It's not our skill set without buying a company or it would take too long to grow it ourselves. And it could be a channel that we're not in. It could be a customer base or a geography that we're not in. It would be related, of course, to branded merchandise in particular. But I don't think we have a -- or another area we'd be very interested in is digital. I don't think we have much of an appetite to buy your run-of-the-mill promotional company that basically is selling out of a catalog somewhere, and just has a couple of good customers. And that's not really what we're looking for. We're looking for something that's very additive to our business. And so as Jake just reminded you, we kiss a lot of frogs because a lot of people for to be able to do a lot more than just the run-of-the-mill type of work that promotional merchandise companies usually do. And then when we get under the covers, we can find out they're very, very normal and there's nothing special about them. So it will take time. Jake Himelstein: And Keegan, by way of example, I mean, if you look back a little over 4 years ago, 5 years ago almost, we acquired a company called Guardian Products, and that was an area where we were not in. It was promotional products and branded merchandise for auto dealerships. It's tangential. It's related to what we're doing. We were not in that market. We acquired our way into that market and have now grown it substantially since we acquired it organically. And that's the exact type of acquisition that's really beneficial for us. And it's in our space, but not something that we're currently doing. And it provides a great blueprint or road map for what we want to do in the future. Keegan Tierney Cox: Got it. And then one more, if I can. We've kind of talked about the dynamic of hospitals and other institutional customers bearing leaner inventories. I guess, as we look at this Healthcare Apparel transformation, is there any impact? How are inventory replenishment trends evolving? Is there any risk to kind of missing out on that trend as you focus that assortment? Michael Benstock: Not -- this is Michael. Not really. I believe that in the past, we've spoken about the institutional side conserving cash and with all the uncertainty around them and not knowing what the reimbursements were going to be from the government and everything else. I think most of that is behind them now. Their business has become very, very normalized. So -- and we're starting to see that rev up a little bit to more normal situation. I don't -- I think the bigger impact, one of the truth has to -- is on the consumer. With consumer paying what they're paying for food and gas, it's -- and rent and everything else that's gone through the stratosphere. I think a lot of the caregiver community doesn't have as much to spend as they might have a couple of years ago. And so they're being prudent. The good news with respect to that is our consumer product area, which is basically the Wink and the Carhartt scrubs that we sell, we have a good, better, best and even a value channel for that. So if they're looking to spend less, they can go from best down to better or better down to good. We can service them at all levels. And if they're already loyal to our brands, it makes it that much easier for them to make the transition since their awareness is so high. Keegan, you there? Keegan Tierney Cox: Yes. Great. That does answer my question. Operator: Our next question comes from Jim Sidoti with Sidoti & Company. James Sidoti: So Branded Products, this is third strong quarter. What are you hearing from your customers there? Are you starting to get the sense that they're a little bit more confident in the economy and what's going on? Or just overall, what's the customer sentiment? Jake Himelstein: Jim, this is Jake. I think the tariff situation becoming a little bit more normalized has certainly helped, right? We had a couple of quarters last year where there's a lot of uncertainty around tariffs and that created client uncertainty, which created buying uncertainty. That has helped us certainly. Additionally, us just pushing for more business within our existing clients to grow who we're working with, right? Remember with the HR department, well, if we push into marketing or we push into HR or we push into legal, that helps us, right? Every department in a company -- in a large company is buying branded merchandise, whether it's uniforms or promotional products or gifting. So a lot of it is improved customer sentiment, but a good part of it is also just us expanding share of wallet within existing customers, which a lot of times we tell our sales team that our best customer is a current customer because there is a lot of potential at our existing customers to continue to grow. James Sidoti: And on the Contact Centers business, this is the second quarter with sequential improvement. do you think that trend continues throughout the year? Or do you think you hit the low watermark, I guess, at the end of last year, and do you expect that business to continue to grow every quarter? Michael Koempel: We do expect, Jim, for it to continue. And as I mentioned earlier, our guidance reflects the continued sequential improvement in Contact Centers. So I'd say we're -- like I said, when we started the year, we expected Q1 to be better than Q4, Q2 better than Q1, and it's working out that way, and we're seeing some improvement in conversion and just growth within existing customers. So we're optimistic. And again, the team has done a great job staying focused on managing expenses with that growth. And we talked about before, we're leveraging technologies internally to not only improve the customer experience through various AI solutions, but we're also leveraging it to create more efficiencies, which again is helping to keep expenses in check and drop incremental growth to EBITDA. James Sidoti: All right. And then last one for me. Even with the $2.6 million write-down for Healthcare Apparel inventory, inventory is down at a little over $90 million. It hasn't been down this low in at least 6 or 7 quarters. What's going on there? Is that a trend that continues? Michael Koempel: We -- there's still opportunity, Jim, in our view, to create more efficiency in the Healthcare inventories. So we're still focused on bringing those inventories down overall. With that said, as you might imagine, there's pockets of inventory that we're also chasing. So not all inventory is created equal. And I think that we see overall the opportunity to bring inventory down, but we also want to be very thoughtful around not reducing too much and negatively impacting sales. So there'll be some decreases and again, certain categories, and we'll continue to make investments in others based on demand. But again, overall, we see that being a continued, I'll say, source of cash to us as we look at our cash flow projection going forward. Operator: Our next question comes from Frank DiLorenzo with Singular Research. Frank DiLorenzo: Just a follow-up to M&A opportunities. Can we expect any new acquisitions or even partnerships for the balance of this year? Michael Benstock: I'll answer that, Frank. As we've said we have a certain level of urgency in our Contact Centers business. And either we will have an acquisition done this year or we will find ourselves doing a start-up of a call center in the Philippines. -- that will begin this year and begin to provide revenue next year. Other than that, I would say at this point in the year, there would probably be no other acquisitions other than one in the Contact Centers business that might happen. Frank DiLorenzo: Okay. Also maybe not directly related to the business, but the cyclospora outbreak, can you talk about that a little bit? Has that had any impact whatsoever on any of your businesses? Michael Benstock: Not yet. Not yet. That wraps up the questions, Bailey. Operator: All right. This concludes our question-and-answer session. I would like to turn the conference back over to Michael Benstock for any closing remarks. Michael Benstock: Thank you all. Thanks, operator. We appreciate you joining us today. We always appreciate your interest in Superior Group Companies and look forward to updating you as we move through the back half of the year. As always, please don't hesitate to reach out with any additional questions, and we look forward again to seeing many of you at upcoming conferences. Thanks again. Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect. Before you buy stock in Superior Group Of Companies, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Superior Group Of Companies wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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Total net sales of $147.8 million, up from $144.0 million in prior year second quarter Net income of $1.2 million, including a non-cash tradename impairment charge, $2 million after tax, versus $1.6 million in prior year second quarter Adjusted EBITDA of $7.7 million, up from $6.1 million in prior year second quarter Confirms full-year Outlook Board of Directors approves $0.14 per share quarterly dividend ST. PETERSBURG, Fla., Aug. 04, 2026 (GLOBE NEWSWIRE) -- Superior Group of Companies, Inc. (NASDAQ: SGC) (the “Company”), today announced its second quarter 2026 results. “We’ve demonstrated the earnings power of our diversified business with Branded Products performing especially well this quarter, resulting in an adjusted EPS that was more than double the prior year’s second quarter. We are navigating through soft market conditions, and we see growth opportunities ahead for all three of our attractive businesses,” said Michael Benstock, Chief Executive Officer.  “Our guidance continues to reflect stronger results in the back half of the year given seasonal factors. Ultimately, our diverse end markets, high customer retention and flexible supply chain combined with our healthy balance sheet allows us to drive continued growth and optimize shareholder value including through our attractive dividend yield and opportunistic share repurchases.” Second Quarter Results For the second quarter ended June 30, 2026, net sales were $147.8 million, up from second quarter 2025 net sales of $144.0 million. Net income was $1.2 million or $0.08 per diluted share compared to net income of $1.6 million or $0.10 per diluted share for the second quarter of 2025. During the second quarter the Company recorded a trade name impairment charge in the Healthcare Apparel segment of $2.6 million (or $2.0 million net of tax, or $0.13 per diluted share). The charge does not affect the Company’s cash position, cash flow from operating activities or bank debt covenants. On an adjusted basis, excluding the impairment charge, second quarter net income was $3.2 million or $0.21 per diluted share up from net income of $1.6 million, or $0.10 per diluted share for the second quarter of 2025. At the conclusion of this press release is a reconciliation of reported-to-adjusted results, including a description of the significant item. Quarterly Dividend The Board of Directors declared a quarterly dividend of $0.14 per share, payable August 28, 2026 to shareholders of record as of August 14, 2026. 2026 Full-Year Outlook The Company continues to forecast full-year 2026 net sales in the range of $572.0 million to $585.0 million, up from 2025 net sales of $566.2 million, and full-year adjusted earnings per diluted share in the range of $0.54 to $0.66, up from $0.46 in 2025. Webcast and Conference Call The Company will host a webcast and conference call at 8:00am Eastern Time today. The live webcast and archived replay can be accessed in the investor relations section of the Company's website at https://ir.superiorgroupofcompanies.com/Presentations. Interested individuals may also join the teleconference by dialing 1-844-861-5505 for U.S. dialers and 1-412-317-6586 for international dialers. The Canadian toll-free number is 1-866-605-3852. Please ask to be joined to the Superior Group of Companies call. A telephone replay of the teleconference will be available through August 18, 2026. To access the replay, dial 1-855-669-9658 in the United States or Canada, or 1-412-317-0088 from international locations. Please reference conference number 5851649 for replay access. Disclosure Regarding Forward-Looking Statements Certain matters discussed in this press release are “forward-looking statements” intended to qualify for the safe harbors from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements can generally be identified by use of the words “may,” “will,” “should,” “could,” “expect,” “anticipate,” “estimate,” “believe,” “intend,” “project,” “potential,” or “plan” or the negative of these words or other variations on these words or comparable terminology. Forward-looking statements in this press release include 2026 guidance of net sales and earnings per diluted share and may also include, without limitation: (1) projections of revenue, income, and other items relating to our financial position and results of operations, including short term and long term plans for cash, (2) statements of our plans, objectives, strategies, goals and intentions, (3) statements regarding the capabilities, capacities, market position and expected development of our business operations and (4) statements of expected industry and general economic trends. Such forward-looking statements are subject to certain risks and uncertainties that may materially adversely affect the anticipated results. Such risks and uncertainties include, but are not limited to, the following: the impact of competition; the impact of global conflicts, such as the Russia-Ukraine War and the joint U.S.-Israeli War with Iran in 2026, uncertainties related to tariffs, duties, trade wars and related matters, supply disruptions, inflationary environments (including with respect to shipping costs and the cost of finished goods and raw materials and shipping costs), employment levels (including labor shortages), and general economic and political conditions in the areas of the world in which the Company operates or from which it sources its supplies or the areas of the United States of America (“U.S.” or “United States”) in which the Company’s customers are located; changes in the healthcare, retail chain, food service, transportation and other industries where uniforms and service apparel are worn; our ability to identify suitable acquisition targets, discover liabilities associated with such businesses during the diligence process, successfully integrate any acquired businesses, or successfully manage our expanding operations; the price and availability of raw materials; attracting and retaining senior management and key personnel; the Company's ability to maintain effective internal control over financial reporting; and other factors described in the Company’s filings with the Securities and Exchange Commission ("SEC"), including those risks described in Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 entitled "Risk Factors" and the Quarterly Report on Form 10-Q for the quarter ended June 30, 2026. Shareholders, potential investors and other readers are urged to consider these factors carefully in evaluating the forward-looking statements made herein and are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements made herein are only made as of the date of this press release and we disclaim any obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances, except as may be required by law. About Superior Group of Companies, Inc. (SGC): Established in 1920, Superior Group of Companies is comprised of three attractive business segments each serving large, fragmented and growing addressable markets. Across Healthcare Apparel, Branded Products and Contact Centers, each segment enables businesses to create extraordinary brand engagement experiences for their customers and employees. SGC’s commitment to service, quality, advanced technology, and omnichannel commerce provides unparalleled competitive advantages. We are committed to enhancing shareholder value by continuing to pursue a combination of organic growth and strategic acquisitions. For more information, visit www.superiorgroupofcompanies.com. Investor Relations Contact:[email protected] (1) Adjusted EBITDA, which is a non-GAAP financial measure, is defined as net income excluding interest expense, net, income tax expense, impairments and depreciation and amortization expense. Adjusted EBITDA margin is defined as Adjusted EBITDA divided by net sales. The Company believes Adjusted EBITDA is an important measure of operating performance because it allows management, investors and others to evaluate and compare the Company’s core operating results from period to period by removing (i) the impact of the Company’s capital structure (interest expense from outstanding debt), (ii) tax consequences, (iii) asset base (depreciation and amortization) and (iv) impairments. The Company uses Adjusted EBITDA internally to monitor operating results and to evaluate the performance of its business. In addition, the compensation committee has used Adjusted EBITDA in evaluating certain components of executive compensation, including performance-based annual incentive programs. Adjusted EBITDA is not a measure of financial performance under GAAP.  Adjusted EBITDA should not be considered in isolation or as an alternative to net income, cash flows from operating activities or any other measure determined in accordance with GAAP. The items excluded to calculate Adjusted EBITDA are significant components in understanding and assessing the Company’s results of operations. The Company’s Adjusted EBITDA may not be comparable to a similarly titled measure of another company because other entities may not calculate Adjusted EBITDA in the same manner.(2) The tax impact of adjustments includes the tax effect of each separate adjustment based on the statutory tax rate for the jurisdiction(s) in which the adjustment was taxable or deductible, and the tax effect of items that relate to tax specific financial transactions.(3) Adjusted net income and diluted adjusted net income per share, which are non-GAAP measures, are defined as net income (loss) and net income (loss) per share, excluding the impacts of impairment and pension plan termination charges. Management believes adjusted net income (loss) and diluted adjusted net income (loss) per share provides useful information to investors because it allows management, investors and others to evaluate and compare our operating results from period to period by removing the impact of impairment and pension plan termination charges that are not reflective of our core business. Adjusted net income and Diluted adjusted net income per share should not be considered in isolation or as an alternative to net income or net income per share or any other measure determined in accordance with GAAP. The items excluded to calculate Adjusted net income and Diluted adjusted net income per share are significant components in understanding and assessing the Company’s net income. The Company’s Adjusted net income and Diluted adjusted net income per share may not be comparable to a similarly titled measure of another company because other entities may not calculate Adjusted net income and Diluted adjusted net income per share in the same manner.(4) Segment Adjusted EBITDA, as reported below for each segment, is our primary measure of segment profitability under U.S. GAAP ASC 280 “Segment Reporting”. Amounts included in income before income tax expense and excluded from Segment Adjusted EBITDA include: interest expense, net, impairments and depreciation and amortization expense. Total Segment Adjusted EBITDA is a non-GAAP financial measure and is reconciled to its most closely comparable GAAP metric of income before income tax expense (benefit) in the table above.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Consolidated revenue growth of 3% was primarily fueled by the Branded Products segment, which benefited from increased volumes with existing customers and favorable customer mix. The Healthcare Apparel segment faced a challenging quarter, impacted by a strategic decision to accelerate a shift toward a more focused, 'narrow and deep' product offering. Contact Centers showed sequential improvement for the second consecutive quarter, signaling a recovery from 2025 client attrition through a net increase in agents and a larger new business pipeline. Management attributed the significant expansion in adjusted EPS to improved SG&A leverage and a reduction in interest expense from lower average debt outstanding. Operational efficiencies in Contact Centers were maintained through cost reductions and the integration of AI solutions to enhance customer experience and internal productivity. The company is navigating a 'choppy' demand environment by relying on its flexible supply chain and diversified business model to offset specific segment headwinds. Full-year 2026 guidance remains unchanged, assuming a back-half weighted performance driven by seasonal healthcare demand and continued sequential growth in Contact Centers. The Healthcare Apparel transition under new leadership is expected to cause continued, though moderated, margin pressure through the end of 2026 before improving in 2027. Management anticipates Contact Center gross margins will rebound in the second half of the year as initial onboarding costs for new customers do not repeat. Strategic focus for the remainder of the year includes further inventory optimization in Healthcare Apparel to serve as a continued source of operating cash flow. The company is evaluating a potential acquisition or a new organic startup in the Philippines for the Contact Centers segment to expand global delivery capabilities. A $2.6 million non-cash inventory write-down was recorded in Healthcare Apparel to facilitate the transition to a more efficient product assortment architecture. A $2.6 million non-cash trade name impairment charge was recognized, reflecting adjusted expectations for specific legacy brands within the Healthcare segment. The company realized a $1.8 million net tariff refund benefit, which partially offset the gross margin compression in the Healthcare Apparel business. Management noted that while institutional healthcare demand is normalizing, the 'caregiver community' faces discretionary spending pressure due to high costs for essentials like food and rent. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. New leadership is focusing on 'assortment architecture,' moving toward a more focused product line which involves long lead times for sourcing and merchandising. Management expects the transition to result in stronger, more sustainable margins and more efficient working capital usage starting in 2027. Growth is being driven by 'share of wallet' expansion within existing large clients by selling into different departments like marketing and HR. The segment is seeing a strong pipeline despite slower corporate decision-making on RFPs, with wins already scheduled to roll out into 2027. The company is avoiding 'run-of-the-mill' promotional firms, instead seeking targets that add specific digital capabilities, new geographies, or unique service channels. There is a specific 'level of urgency' for an acquisition in the Contact Centers segment to bolster growth before the end of the year.

Interested in Superior Group of Companies, Inc.? Here are five stocks we like better. Second-quarter results improved: Revenue rose 3% year over year to $148 million, EBITDA increased 27% to $7.7 million, and adjusted diluted EPS more than doubled to $0.21 from $0.10. Branded Products led performance, with revenue up 6% and EBITDA up 25%, while Healthcare Apparel revenue fell 4% amid inventory write-downs, an impairment charge and ongoing product-line restructuring. Contact Centers also showed sequential revenue improvement despite a year-over-year decline. Full-year 2026 guidance was reaffirmed at $572 million–$585 million in sales and $0.54–$0.66 in adjusted diluted EPS. Management expects continued Healthcare Apparel margin pressure but sequential improvement in Contact Centers during the second half. Superior Group of Companies (NASDAQ:SGC) reported second-quarter revenue growth, higher EBITDA and more than doubled adjusted earnings per share, while maintaining its full-year outlook amid continued transition work in its Healthcare Apparel business. Chief Executive Officer Michael Benstock said consolidated revenue increased 3% year over year, while SG&A as a percentage of sales improved by 160 basis points. EBITDA rose 27% to $7.7 million, and adjusted diluted earnings per share reached $0.21, compared with $0.10 in the second quarter of 2025. → SpaceX’s First Earnings Report Could Decide Whether Shorts or Bulls Have Control “Our results highlight the benefit of our diversified business as we continue to navigate a choppy demand environment,” Benstock said. He cited customer relationships, technology, supply-chain flexibility and service capabilities as factors supporting the company’s outlook. Second-quarter consolidated revenue totaled $148 million. Branded Products revenue increased 6% to $98 million, driven by higher volumes from existing customers. The segment’s gross margin increased to 36.5%, nearly a percentage point above the prior-year period, aided by customer mix. → Financials Hit Record Highs as the AI Trade Unravels—Can They Keep Leading? Branded Products EBITDA increased 25% year over year. Jake Himelstein, president of the Branded Products segment, said favorable customer mix and improved sourcing on larger programs supported margins. Himelstein said the segment’s pipeline remains strong across both existing and prospective customers, with some opportunities converting into programs that are generating revenue in 2026 and are expected to extend into 2027. He said decision-making on requests for proposals remains slow, but the size of the pipeline has helped produce wins. → Why Rare Earth Processing Could Be the Real 2027 Opportunity The company also said it is gaining share organically by expanding relationships with current customers across departments that purchase uniforms, promotional products and gifts. Himelstein said normalized tariff conditions have helped reduce customer uncertainty compared with prior periods. On acquisitions, management said it remains open to deals that expand its capabilities, customer reach, geographic presence or digital offerings. Benstock said the company is not seeking conventional promotional-product companies without differentiated capabilities. Healthcare Apparel revenue declined 4% to $27 million, which Chief Financial Officer Mike Kemple attributed to tariff refunds. Segment gross margin was 32.9%, reflecting a $2.6 million incremental non-cash inventory write-down that was partly offset by a $1.8 million net tariff-refund benefit. The company also recorded a $2.6 million pre-tax non-cash impairment charge related to trade names in the Healthcare Apparel segment. The charge equaled $2 million after tax, or $0.13 per diluted share, and did not affect cash or operating cash flow. Benstock said the business is accelerating a shift to a more focused product offering. Kemple said Chris Hine, who had been in the business for roughly three to four months, has concentrated initially on product assortment, merchandising and sourcing because of the segment’s long product lead times. Management expects some year-over-year margin pressure to continue through the remainder of 2026, though not at the level seen in the second quarter. Kemple said improvements are expected to begin in 2027. Inventory efficiency remains a focus in Healthcare Apparel. Kemple said the company sees further opportunity to lower overall inventory, while continuing to invest in categories where demand warrants it and avoiding inventory reductions that could hurt sales. Contact Centers revenue fell 4% year over year to $23 million, reflecting client attrition during 2025. However, revenue improved sequentially for the second consecutive quarter, following an 8% year-over-year decline in the first quarter. The segment’s gross margin was 50.9%, down 170 basis points from the year-earlier period, as the company incurred higher human-capital costs and initial investments to onboard new customers. Kemple said some onboarding costs will not recur and that gross margin should improve in the second half. Despite lower gross margin, Contact Centers EBITDA improved, supported by lower SG&A expenses, cost reductions and efficiencies. Kemple said the company is using technology and artificial intelligence solutions to improve customer experiences and operating efficiency. Management expects continued sequential top-line improvement in the segment during the second half, supported by expansion with existing clients, more customer-seat additions and improved conversion of new business. Benstock said the company has urgency around expanding Contact Centers and could either complete an acquisition this year or begin a Philippine call-center startup that would begin generating revenue in 2027. Net income for the quarter was $1.2 million, or $0.08 per diluted share. Excluding the trade-name impairment, adjusted net income was $3.1 million, or $0.21 per diluted share. Second-quarter EBITDA: $7.7 million, compared with $6.1 million a year earlier. Second-quarter gross margin: 38%, down 40 basis points year over year. Net interest expense: $981,000, down from $1.25 million, reflecting lower interest rates and lower average debt. Cash and equivalents at quarter-end: $23 million. First-half operating cash flow: $18 million. Second-quarter dividends paid: $2.2 million. Remaining share-repurchase authorization: approximately $9 million. The company reaffirmed its 2026 outlook for net sales of $572 million to $585 million and adjusted diluted EPS of $0.54 to $0.66. Kemple said the guidance assumes a back-half-weighted year, including seasonal strength in Healthcare Apparel and sequential improvement in Contact Centers. Management said it retained the outlook despite the second-quarter performance because Healthcare Apparel remains in transition and could experience variability in demand and margins through the rest of the year. The company plans to revisit guidance after the third quarter. Superior Group of Companies is a global developer and manufacturer of specialty packaging materials, including films, laminations and pressure-sensitive adhesives. Founded in 1969 and headquartered in Santa Fe Springs, California, the company combines advanced printing technologies with materials science expertise to deliver customized packaging solutions for industries such as food and beverage, healthcare, personal care and household products. Through a network of manufacturing and distribution facilities across North America, Europe and Asia, Superior Group serves both multinational brand owners and regional producers. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Superior Group of Companies Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

This article first appeared on GuruFocus. Consolidated Revenue: $148 million, up 3% year-over-year. Branded Products Revenue: $98 million, up 6% year-over-year. Healthcare Apparel Revenue: $27 million, down 4% year-over-year. Contact Center Revenue: $23 million, down 4% year-over-year but improved sequentially. Gross Margin: 38%, down 40 basis points year-over-year. Branded Products Gross Margin: 36.5%, up nearly a full percentage point year-over-year. Healthcare Apparel Gross Margin: 32.9%, impacted by a $2.6 million non-cash inventory write-down, partially offset by a $1.8 million net tariff refund benefit. Contact Center Gross Margin: 50.9%, down 170 basis points year-over-year. SG&A as a Percent of Sales: 34.7%, improved 160 basis points year-over-year. EBITDA: $7.7 million, up from $6.1 million in the year-ago period. Net Income: $1.2 million, or $0.08 per diluted share. Adjusted Net Income: $3.1 million, or $0.21 per diluted share, excluding a $2.6 million pre-tax non-cash impairment charge. Net Interest Expense: $981,000, improved from $1.25 million in the prior year. Operating Cash Flow: $18 million generated in the first half of 2026. Cash and Equivalents: $23 million at the end of the second quarter. Dividends Paid: $2.2 million during the second quarter. Share Repurchase Authorization: Approximately $9 million available. Full Year 2026 Net Sales Guidance: $572 million to $585 million. Full Year 2026 Adjusted Diluted EPS Guidance: $0.54 to $0.66. Warning! GuruFocus has detected 8 Warning Sign with SGC. Is SGC fairly valued? Test your thesis with our free DCF calculator. Release Date: August 04, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Consolidated revenue grew 3% year-over-year, with EBITDA up 27% to $7.7 million and adjusted diluted EPS of $0.21, more than doubling the prior year. Branded Products segment delivered 6% revenue growth, driven by higher volumes with existing customers, and achieved a 25% increase in segment EBITDA. SG&A as a percentage of sales improved by 160 basis points, reflecting expense leverage and improved credit loss expense in Branded Products and Contact Centers. Contact Centers segment showed sequential revenue improvement for the second consecutive quarter, with a stronger new business pipeline and increased agent conversion. The company maintains a solid balance sheet with $23 million in cash, $18 million in first-half operating cash flow, and continues to return capital via dividends and share repurchases. Management remains optimistic about growth opportunities, citing a strong pipeline in Branded Products and potential for margin expansion across segments. Healthcare Apparel segment revenue declined 4% year-over-year, with gross margin down 260 basis points due to a $2.6 million non-cash inventory write-down. The healthcare apparel segment EBITDA declined by $1 million year-over-year, and the company expects continued margin pressure through the balance of 2026. Contact Centers segment revenue was down 4% year-over-year, with gross margin down 170 basis points due to higher human capital costs for onboarding new customers. The company recognized a $2.6 million pre-tax non-cash impairment charge related to a trade name in the healthcare apparel segment, impacting reported net income. Full-year 2026 guidance remains unchanged, reflecting a back-half-weighted cadence and potential variability from the healthcare apparel transition, which may limit near-term upside. Consumer spending in the healthcare apparel market is pressured by inflation, leading to more prudent purchasing behavior among caregivers. Q: Can you outline the operational changes Chris Hines is making in the healthcare apparel segment and when these initiatives will start producing measurable revenue growth and margin improvement? A: Mike Koempel, President and CFO, explained that Chris Hines, who has been in the role for about three to four months, has focused primarily on the product and assortment architecture, which is the long lead time in the business. The strategy is to move toward a more focused assortment, going "narrow and deeper." This transition is causing short-term margin pressure, which will continue through the balance of the year, though not to the extent seen in Q2, with improvements expected to begin in 2027. Q: Can you provide more color on the contact center segment's margin improvement and when the segment will return to year-over-year revenue growth? A: Mike Koempel noted that the margin improvement is driven by sustained SG&A cost reductions and lapping a prior-year credit loss reserve. The company expects sequential top-line improvement, which will drive EBITDA margin expansion. While gross margins were down slightly due to one-time onboarding costs for new customers, they expect the gross margin rate to improve in the back half. Revenue growth is expected to continue improving sequentially into Q3 and Q4, driven by seat expansions with existing customers and higher conversion of new business. Q: What is driving the strong margin improvement in the branded products segment, and how does the growth pipeline look for the rest of the year? A: Jay Kimmelstein, President of Branded Products, attributed the margin improvement to favorable customer mix and improved sourcing on larger programs. The pipeline remains strong across both existing and new customers, with some wins already delivering revenue and more set to roll out through 2026 and into 2027. While RFP decisions are slower, the large pipeline is converting into wins, and the company is replenishing the pipeline with new opportunities. Growth in the current quarter was primarily volume-driven from existing customers. Q: Given the solid second quarter results, why was the full-year guidance left unchanged? A: Mike Koempel explained that the guidance reflects a back-half weighted cadence, particularly for the healthcare business, which is typically heavier in Q3. The guidance also accounts for the ongoing transition in healthcare apparel, which will bring some margin pressure in the back half. Given the variability associated with these changes, management felt it was appropriate to hold guidance at this point, though they remain optimistic and will revisit it after Q3. Q: Is the company gaining market share organically in branded products, and are there plans for acquisitions? A: Jay Kimmelstein confirmed the company is gaining share organically and will continue to pursue organic growth aggressively. Michael Benstock, CEO, added that they are looking for acquisitions that are additive, such as expanding capabilities, channels, or customer bases they don't currently serve, particularly in digital or specialized areas. They are not interested in run-of-the-mill promotional companies. The Guardian Products acquisition was cited as a blueprint for the type of deal they seek. Q: How are inventory replenishment trends evolving in healthcare apparel, and is there a risk of missing out on demand as the assortment is focused? A: Michael Benstock stated that institutional customers have normalized their buying after a period of conserving cash. The bigger impact is on the consumer side, where caregivers have less disposable income due to inflation. However, the company's "good, better, best" product strategy, including the Wink and Carhartt brands, allows them to serve customers at all price points, making it easier for loyal customers to trade down without losing them. Q: What is the customer sentiment in the branded products segment, and is the economic environment improving? A: Jay Kimmelstein noted that the normalization of the tariff situation has helped reduce buying uncertainty. Beyond improved sentiment, growth is being driven by expanding share of wallet within existing customers by pushing into different departments like marketing, HR, and legal. He emphasized that the best customer is a current customer, as there is significant potential for growth within the existing client base. Q: Do you expect the contact center segment to continue its sequential improvement throughout the year? A: Mike Koempel confirmed that the guidance reflects continued sequential improvement in the contact center segment. The company is seeing better conversion rates and growth within existing customers. The team is leveraging AI technologies internally to improve customer experience and create efficiencies, which helps keep expenses in check and drops incremental growth to EBITDA. Q: With inventory down to just over $90 million, is there more room to reduce inventory levels in healthcare apparel? A: Mike Koempel stated that there is still an opportunity to create more efficiency in healthcare inventories and the company remains focused on bringing levels down. However, they are being thoughtful not to reduce too much and negatively impact sales. While some categories will see decreases, they will continue to invest in others based on demand. Overall, inventory reduction is expected to be a continued source of cash flow. Q: Can we expect any new acquisitions or partnerships for the balance of this year? A: Michael Benstock indicated that there is a sense of urgency in the contact center business. Either an acquisition will be completed this year, or the company will start up a call center in the Philippines this year to begin generating revenue next year. Other than a potential call center acquisition, no other acquisitions are expected this year. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Consolidated revenue growth of 3% was driven by volume gains in existing customer accounts within the Branded Products and Healthcare Apparel segments. Branded Products achieved a 210 basis point gross margin expansion, primarily attributed to a more favorable customer mix compared to the prior year period. Contact Centers revenue declined 8% year-over-year due to legacy client attrition, though sequential improvement from Q4 suggests a stabilizing trajectory. Management attributes the overall earnings beat to broad-based operational progress rather than a single driver, highlighting improved execution across all three business segments. The company is positioning its ability to navigate macro uncertainty as a competitive advantage, citing expertise gained from managing pandemic-era supply chain and tariff disruptions. Cost discipline resulted in SG&A improving by nearly a full percentage point as a percent of sales, aided by previous restructuring and the implementation of AI in Contact Centers. Healthcare Apparel performance was impacted by a shift toward lower-margin customers, leading to a 160 basis point contraction in segment gross margin. Full-year 2026 guidance is maintained, with management expecting results to be heavily weighted toward the second half of the year for both revenue and EPS. Contact Centers are projected to return to year-over-year growth in the back half of 2026, supported by a historical high in the opportunity pipeline and easier year-over-year comparisons. The company expects all three segments to contribute to growth in 2026, supported by continued investments in sales technology, talent, and marketing. New leadership in Healthcare Apparel is currently evaluating the business, with management signaling potential shifts in segment strategy to improve execution. Guidance assumes continued sequential improvement throughout the year, though management remains 'cautiously optimistic' given the choppy macro environment. Geopolitical tensions, specifically the Iran conflict and issues in the Strait of Hormuz, present potential risks to logistics and oil costs, though no material impact is currently reflected in the outlook. The company has initiated the refund process for certain applicable tariffs, but the timing and certainty of these collections remain highly speculative. Q1 EPS of $0.06 included some benefit from timing shifts, as some Branded Products revenue occurred earlier than originally planned, while expense favorability was driven by a combination of true reductions and timing shifts. M&A activity is being actively explored within the Contact Center space, specifically targeting smaller centers in lower-cost geographies that struggle to fund AI and automation investments. Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management stated the customer base is highly diversified across industries, providing insulation from specific sector layoffs such as those in the restaurant industry. The RFP pipeline at the end of Q1 was described as the strongest in recent memory, with several large opportunities expected to close in Q2 and beyond. CEO Michael Benstock noted a 'rich environment' for M&A as smaller centers fail to keep pace with the high capital requirements for AI and automation. The company is specifically looking for acquisition targets in lower-cost environments to complement its existing technology-forward infrastructure. Management confirmed that while logistics costs are rising, Q1 results were protected because inventory was already on the shelves before recent disruptions. The company is working with vendors to mitigate future pressure but noted that pricing adjustments may be necessary if costs become material. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here.

ST. PETERSBURG, Fla., May 04, 2026 (GLOBE NEWSWIRE) -- Superior Group of Companies, Inc. (NASDAQ: SGC) (the “Company”), today announced its first quarter 2026 results. “Against a still uncertain economic backdrop, our first quarter results show that we are continuing to move Superior Group of Companies in the right direction, even as there is still work to reach the level of performance we are targeting,” said Michael Benstock, Chief Executive Officer. “We are seeing the benefits of the portfolio and cost actions we’ve taken over the last several years, with healthier business mix, improved underlying profitability and stronger earnings power than a year ago, despite uneven demand across our end markets. While macro and geopolitical conditions remain difficult to predict and are weighing on customer spending in certain categories, our diversified segments, strong customer relationships and flexible supply chain position us to continue taking share where we choose to compete. Consistent with the historical cadence of our business, we expect performance to be more heavily weighted to the back half of 2026, and our balance sheet and cash generation give us the ability to keep investing in our most differentiated solutions while returning capital to shareholders through our dividend and opportunistic share repurchases in support of long-term value creation.” First Quarter Results For the first quarter ended March 31, 2026, net sales were $140.9 million, compared to first quarter 2025 net sales of $137.1 million. Pretax earnings of $1.1 million compared to ($0.9) million in the first quarter of 2025. Net earnings of $0.8 million or $0.06 per diluted share compared to a net loss of ($0.8) million or ($0.05) per diluted share for the first quarter of 2025. First Quarter 2026 Dividend The Board of Directors declared a quarterly dividend of $0.14 per share, payable May 29, 2026 to shareholders of record as of May 15, 2026. 2026 Full-Year Outlook The Company continues to forecast full-year 2026 net sales in the range of $572 million to $585 million, up from 2025 net sales of $566.2 million, and full-year earnings per diluted share in the range of $0.54 to $0.66, up from $0.46 in 2025. Webcast and Conference Call The Company will host a webcast and conference call at 8:00am Eastern Time today. The live webcast and archived replay can be accessed in the investor relations section of the Company's website at https://ir.superiorgroupofcompanies.com/Presentations. Interested individuals may also join the teleconference by dialing 1-844-861-5505 for U.S. dialers and 1-412-317-6586 for International dialers. The Canadian toll-free number is 1-866-605-3852. Please ask to be joined to the Superior Group of Companies call. A telephone replay of the teleconference will be available through May 11, 2026. To access the replay, dial 1-855-669-9658 in the United States or Canada, or 1-412-317-0088 from international locations. Please reference conference number 4789430 for replay access. Disclosure Regarding Forward Looking Statements Certain matters discussed in this press release are “forward-looking statements” intended to qualify for the safe harbors from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements can generally be identified by use of the words “may,” “will,” “should,” “could,” “expect,” “anticipate,” “estimate,” “believe,” “intend,” “project,” “potential,” or “plan” or the negative of these words or other variations on these words or comparable terminology. Forward-looking statements in this press release may include, without limitation: (1) projections of revenue, income, and other items relating to our financial position and results of operations, including short term and long term plans for cash, (2) statements of our plans, objectives, strategies, goals and intentions, (3) statements regarding the capabilities, capacities, market position and expected development of our business operations and (4) statements of expected industry and general economic trends. Such forward-looking statements are subject to certain risks and uncertainties that may materially adversely affect the anticipated results. Such risks and uncertainties include, but are not limited to, the following: the impact of competition; uncertainties related to tariffs, duties, trade wars and related matters, supply disruptions, inflationary environments (including with respect to shipping costs and the cost of finished goods and raw materials and shipping costs), employment levels (including labor shortages), and general economic and political conditions in the areas of the world in which the Company operates or from which it sources its supplies or the areas of the United States of America (“U.S.” or “United States”) in which the Company’s customers are located; changes in the healthcare, retail chain, food service, transportation and other industries where uniforms and service apparel are worn; our ability to identify suitable acquisition targets, discover liabilities associated with such businesses during the diligence process, successfully integrate any acquired businesses, or successfully manage our expanding operations; the price and availability of raw materials; attracting and retaining senior management and key personnel; the Company's ability to maintain effective internal control over financial reporting; and other factors described in the Company’s filings with the Securities and Exchange Commission ("SEC"), including those risks described in Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 entitled "Risk Factors" and the Quarterly Report on Form 10-Q for the quarter ended March 31, 2026. Shareholders, potential investors and other readers are urged to consider these factors carefully in evaluating the forward-looking statements made herein and are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements made herein are only made as of the date of this press release and we disclaim any obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances, except as may be required by law. About Superior Group of Companies, Inc. (SGC): Established in 1920, Superior Group of Companies is comprised of three attractive business segments each serving large, fragmented and growing addressable markets. Across Healthcare Apparel, Branded Products and Contact Centers, each segment enables businesses to create extraordinary brand engagement experiences for their customers and employees. SGC’s commitment to service, quality, advanced technology, and omnichannel commerce provides unparalleled competitive advantages. We are committed to enhancing shareholder value by continuing to pursue a combination of organic growth and strategic acquisitions. For more information, visit www.superiorgroupofcompanies.com. Investor Relations Contact: [email protected] (1) EBITDA, which is a non-GAAP financial measure, is defined as net income excluding interest expense, net, income tax expense and depreciation and amortization expense. EBITDA margin is defined as EBITDA divided by net sales. The Company believes EBITDA is an important measure of operating performance because it allows management, investors and others to evaluate and compare the Company’s core operating results from period to period by removing (i) the impact of the Company’s capital structure (interest expense from outstanding debt), (ii) tax consequences and (iii) asset base (depreciation and amortization). The Company uses EBITDA internally to monitor operating results and to evaluate the performance of its business. In addition, the compensation committee has used EBITDA in evaluating certain components of executive compensation, including performance-based annual incentive programs. EBITDA is not a measure of financial performance under GAAP. EBITDA should not be considered in isolation or as an alternative to net income, cash flows from operating activities or any other measure determined in accordance with GAAP. The items excluded to calculate EBITDA are significant components in understanding and assessing the Company’s results of operations. The Company’s EBITDA may not be comparable to a similarly titled measure of another company because other entities may not calculate EBITDA in the same manner. (1) Segment EBITDA is our primary measure of segment profitability under U.S. GAAP ASC 280 “Segment Reporting”. Amounts included in income before income tax expense and excluded from Segment EBITDA include: interest expense, net and depreciation and amortization expense. Total EBITDA is a non-GAAP financial measure. Please see reconciliation of Total EBITDA included in the Non-GAAP Financial Measures table above.

Q1 results showed improvement: Revenue rose 3% to $141 million, EBITDA increased to $4.8 million (from $3.5M) and EPS was $0.06 versus a $0.05 loss a year ago, while management maintained full-year guidance of $572–585 million in net sales and $0.54–0.66 in diluted EPS with results weighted to the back half of 2026. Mixed segment performance: Branded Products led growth (+5% to $91M) with a strong pipeline and backlog, Healthcare Apparel also grew 5% but with margin pressure and a new president reviewing strategy, and Contact Centers fell 8% to $22M though management expects sequential improvement and a historically strong pipeline to drive back-half recovery. Healthy cash flow but flagged risks: The company ended March with $23M cash, generated over $9M of operating cash flow in the quarter, returned capital via $2M dividends and $0.7M buybacks, but warned of macro and logistics uncertainty (including tariffs and the Iran conflict) and is pursuing possible contact-center M&A. Interested in Superior Group of Companies, Inc.? Here are five stocks we like better. Superior Group of Companies (NASDAQ:SGC) reported higher revenue and profitability in the first quarter of 2026, with management citing broad-based progress across its segments despite a macroeconomic backdrop the company described as uncertain. On the company’s earnings call, Chief Executive Officer Michael Benstock said first-quarter revenue increased 3% year over year and that operating leverage helped lift earnings. “Gross margin rate improved by 30 basis points. SG&A came down as a % of sales by nearly a full point, and EBITDA increased to $4.8 million from $3.5 million last year,” Benstock said. Earnings per share were $0.06 compared to a $0.05 loss in the first quarter of 2025. → Roblox Stock Slides to New Low as Safety Changes Weigh on Outlook Benstock added that the company is “staying focused on execution” even as external uncertainty remains elevated, including “added uncertainty around the Iran conflict.” He pointed to the company’s “broad business mix, good customer relationships, and supply chain flexibility” as strengths in the current environment. President and Chief Financial Officer Michael Koempel said consolidated revenue rose to $141 million. He reiterated that the company’s results are typically “back half weighted with sequential improvement through the year,” which he said is reflected in Superior Group’s 2026 guidance. → The Real SpaceX Play: 5 Chip Stocks Powering the IPO Before It Launches Gross margin improved to 37.1% from the prior year. By segment, Koempel said Branded Products gross margin was 34.1%, “consistent with the fourth quarter” and up 210 basis points year over year due to weaker customer mix in the prior-year period. Healthcare Apparel gross margin fell 160 basis points to 35.6% “mainly because of growth with lower margin customers.” Contact Centers gross margin was 52.2%, down 140 basis points due to higher labor costs. SG&A as a percentage of sales improved to 35.8% from 36.5%. Koempel said SG&A totaled $50 million and included $1 million in severance costs, and was “essentially flat year-over-year despite our top line growth.” EBITDA rose to $4.8 million, and EBITDA margin improved 80 basis points to 3.4%. → 2 Stocks to Watch as the Quantum Space Gets More Crowded Net interest expense was “a little over $900,000,” down from more than $1.2 million in the year-ago quarter, which Koempel attributed to an improved net debt position and a lower weighted-average interest rate. Net income was about $800,000 versus a net loss of about $800,000 a year earlier. Branded Products, the company’s largest segment, grew revenue 5% year over year to $91 million. Benstock said the segment has now posted 5% growth “for the second quarter in a row,” driven by volume gains within existing customer accounts. He said the company improved gross margin and held SG&A near 27% of sales, which helped EBITDA improve versus last year. Benstock added that the company’s “pipeline and backlog remains strong,” and that management plans to continue investing in sales talent and technology to support growth. In the question-and-answer session, Branded Products President Jake Himelstein said the business remains diversified across industries and does not have “any concentration in any given industry,” addressing a question about potential softness in restaurant-industry demand. While he described the macro environment as “a bit choppy,” he said activity remains “really healthy,” citing execution, conversion of RFPs, ramping new sales reps, and expanding existing accounts. Himelstein also said the RFP pipeline at the close of the first quarter “was the strongest it’s been in memory,” with some opportunities expected to close in the second quarter and beyond. Healthcare Apparel revenue increased 5% to $29 million. Benstock said growth was driven by volume gains in existing wholesale accounts and continued progress in direct-to-consumer channels, though he noted that Koempel would address lower EBITDA in the segment. Benstock also introduced Chris Hein, who joined recently as president of Healthcare Apparel, saying Hein brings “deep multi-channel apparel experience” and a track record of building teams and driving results. Koempel said Hein joined in late March and is still evaluating the business. “There will be some shift of the strategy,” Koempel said, adding that the company expects changes and will share more as Hein gets further into his review. Contact Centers revenue declined 8% year over year to $22 million, which Benstock attributed mainly to prior-year client attrition. However, both Benstock and Koempel highlighted sequential improvement from the fourth quarter, supported by expansion within existing customers. Benstock said the segment’s opportunity pipeline is “still at a historical high,” and that with easier comparisons ahead, the company is focused on turning pipeline into year-over-year growth. He added that Contact Centers SG&A declined by more than 200 basis points as a percentage of sales compared to the year-ago quarter, reflecting benefits from prior cost reduction work and ongoing investments in AI and other technologies. As a result, he said segment EBITDA was down only slightly year over year, while margin improved. In response to an analyst question, Koempel said the company expects further sequential improvement and “would expect to see growth in the back half of the year for Contact Centers.” Koempel said the company ended March with $23 million in cash and cash equivalents and generated more than $9 million of operating cash flow in the quarter, on top of $20 million produced in 2025. During the quarter, the company paid $2 million in dividends and repurchased $700,000 of stock, with $9.4 million remaining under its share repurchase authorization. Management maintained full-year guidance, calling the quarter a “solid start.” Koempel said the company continues to expect 2026 net sales of $572 million to $585 million and diluted EPS of $0.54 to $0.66, which he said would be a meaningful improvement versus $0.46 generated last year. He reiterated that both revenue and EPS are expected to be weighted to the back half of the year. Koempel also said first-quarter EPS came in “a little bit higher” than expectations due to timing, including some Branded Products revenue arriving earlier than planned and favorable expenses, which he said reflected a mix of true reductions and quarterly timing shifts. On potential tariff refunds, Benstock said the company “initiated the re-refund process” for certain applicable tariffs, but emphasized uncertainty around “if and when we receive” refunds and noted that timelines for tariffs that did not initially qualify are not yet defined. Benstock also addressed sourcing and logistics volatility, saying the company has seen logistics costs rise but that the impact would not have been reflected in the first quarter because inventory had been on hand before recent disruptions. He said the company is working with vendors to mitigate pressure and does not expect the issue to materially change its outlook, while noting the company may need to adjust pricing over time if impacts emerge. Finally, Benstock said the M&A environment in contact centers is “very rich,” describing industry consolidation driven in part by differing levels of investment in AI and automation. He said the company is evaluating opportunities and suggested investors “should expect to see some movement” over the next year or so, with an emphasis on finding the right fit and potentially adding capacity in a lower-cost environment. Superior Group of Companies is a global developer and manufacturer of specialty packaging materials, including films, laminations and pressure-sensitive adhesives. Founded in 1969 and headquartered in Santa Fe Springs, California, the company combines advanced printing technologies with materials science expertise to deliver customized packaging solutions for industries such as food and beverage, healthcare, personal care and household products. Through a network of manufacturing and distribution facilities across North America, Europe and Asia, Superior Group serves both multinational brand owners and regional producers. The article "Superior Group of Companies Q1 Earnings Call Highlights" was originally published by MarketBeat.