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SG

SUPERIOR GROUP OF COMPANIES, INC. (SGC)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 revenue was $138.5M and diluted EPS was $0.18; EBITDA was $7.5M. Sequentially, EPS and EBITDA improved vs Q2, but revenue and EBITDA were down year over year due to prior-year strength and tariff-driven order timing .
  • Wall Street consensus (S&P Global) for Q3 2025 was $141.9M revenue*, $0.183 EPS*, and $8.09M EBITDA*; results were a modest miss on revenue and EBITDA and essentially in line on EPS (revenue −2.4%, EBITDA −6.8%, EPS −0.003) *.
  • Management tightened FY25 revenue guidance to $560M–$570M (from $550M–$575M), raising the midpoint; dividend maintained at $0.14 per share .
  • Call tone emphasized disciplined SG&A reductions (~$4M y/y in Q3), robust pipelines across segments, tariff mitigation, and sequential momentum into Q4, particularly in Branded Products .

Values retrieved from S&P Global.*

What Went Well and What Went Wrong

What Went Well

  • SG&A declined by ~$3.9–$4.0M year over year to $48.5M; SG&A as a percentage of sales held flat at 35% despite lower revenue, reflecting cost actions initiated in Q2 .
  • Sequential improvement: EBITDA rose to $7.5M from $6.1M in Q2; diluted EPS rose to $0.18 from $0.10, supported by cost reductions and tariff pass-through in Healthcare Apparel .
  • Quote: “Our earnings were as expected, demonstrating solid sequential progress… We were also able to meaningfully improve SG&A” — CEO Michael Benstock .

What Went Wrong

  • Year-over-year declines: revenue −7% to $138.5M; EBITDA to $7.5M from $11.7M; diluted EPS to $0.18 from $0.33, reflecting prior-year peak margins and Q2 pull-forward of Branded orders .
  • Segment pressure: Branded Products revenue −8% y/y (timing, customer mix, smaller orders), Healthcare Apparel −5% (wholesale and institutional softness), Contact Centers −9% (customer downsizing, elongated decisions) .
  • Gross margin compressed to 38.3% (from 40.4% in Q3’24); Contact Centers margin down y/y on higher agent costs and Jamaica center closure mix .

Financial Results

Consolidated Performance (Revenue, EPS, EBITDA, Margins)

MetricQ3 2024Q1 2025Q2 2025Q3 2025
Revenue ($USD Millions)$149.7 $137.1 $144.0 $138.5
Diluted EPS ($)$0.33 $(0.05) $0.10 $0.18
EBITDA ($USD Millions)$11.7 $3.5 $6.1 $7.5
EBITDA Margin %7.8% 2.6% 4.2% 5.4%
Gross Margin %40.4% 36.8% 38.4% 38.3%

Q3 2025 Actual vs Consensus (S&P Global)

MetricActualConsensusSurprise ($)Surprise (%)
Revenue ($USD Millions)$138.5 $141.9*−$3.4−2.4%
Diluted EPS ($)$0.18 $0.183*−$0.003−1.8%
EBITDA ($USD Millions)$7.5 $8.09*−$0.59−6.8%

Values retrieved from S&P Global.*

Segment Net Sales

Segment ($USD Millions)Q3 2024Q1 2025Q2 2025Q3 2025
Branded Products$92.5 $86.5 $92.6 $85.1
Healthcare Apparel$33.0 $27.3 $28.3 $31.5
Contact Centers$25.0 $24.2 $24.0 $22.7
Intersegment Eliminations$(0.9) $(0.9) $(0.8) $(0.8)
Total Net Sales$149.7 $137.1 $144.0 $138.5

KPIs and Operating Metrics

KPIQ3 2024Q1 2025Q2 2025Q3 2025
SG&A ($USD Millions)$52.4 $50.1 $52.2 $48.5
SG&A % of Sales35.0% 36.5% 36.3% 35.0%
Cash & Equivalents ($USD Millions)$18.4 $19.8 $21.0 $16.7
Quarterly Dividend per Share ($)$0.14 $0.14 $0.14 $0.14

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($USD Millions)FY 2025$550–$575 $560–$570 Raised midpoint / tightened range
EPS GuidanceFY 2025$0.75–$0.82 (withdrawn) Not provided Withdrawn (maintained)
DividendQuarterly$0.14 $0.14 Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1–Q2 2025)Current Period (Q3 2025)Trend
Tariffs & trade policyHeightened uncertainty; conservative guidance; shifting sourcing; pass-through pricing planned in branded uniforms and DTC Tariff mitigation via lower-tariff jurisdictions; price increases largely offset Healthcare tariffs; positive tariff announcements over the weekend seen as stabilizing Improving mitigation; still cautious
AI/technology initiativesContact centers using AI for talent, agent guidance (“Guru Assist”); branded products deploying AI agents for product selection/mockups Continued emphasis on automation to improve sales efficiency and customer interactions Execution continuing
Segment demand & pipelinesBranded Products: strong pipeline/backlog; Healthcare: institutional softness; Contact Centers: slower decisions, bankruptcy impact of solar customer Branded: bookings strong, build into Q4; Healthcare: DTC and retail footprint growing; Contact Centers: green shoots, elongated decisions; solar impact ~couple million annualized Gradual conversion expected
Gross margin trajectoryQ1: 36.8%; Q2: 38.4% with sequential improvement; branded margin rebound expected Q3: 38.3%; branded down 140 bps; Healthcare up sequentially; Contact Centers down y/y on cost mix Stable sequential; mixed y/y
M&A postureQ1: conserve cash; selective/accretive; rich field post-tariffs CEO: rich playing field, valuations attractive; expect potential deal within next year, primarily in Branded Products; cautious on Contact Centers geography Increasing readiness

Management Commentary

  • “Our earnings were as expected, demonstrating solid sequential progress from the second quarter and our updated full-year outlook reflects a higher mid-point… We were also able to meaningfully improve SG&A” — Michael Benstock, CEO .
  • “Our consolidated third quarter gross margin of 38.3%… Overall, we improved third quarter SG&A expenses year-over-year by $4 million to $48 million… EBITDA of $7.5 million was up sequentially from $6.1 million” — Mike Koempel, President & CFO .
  • “The new tariff announcements… are definitely positive… We were proactive… able to source things in lower tariff jurisdictions, and expand share of wallet” — Jake Himelstein, President, Branded Products .
  • “Combination of our cash and cash equivalents, plus available capacity under our revolving credit facility, provides SGC with over $100 million of liquidity… share repurchase authorization… ~$12M available” — President & CFO .

Q&A Highlights

  • Pricing power and pass-through: Management stated they largely pass tariff and cost increases through in Branded Products (order-level pricing) and implemented Healthcare price increases in July/August to offset tariffs; rare cases absorb costs .
  • Inventory and sourcing: Opportunistic buys from lower-tariff jurisdictions and domestic sources; instructed clients to pause amid 100% China tariff announcement, resumed buys as environment improved; Haiti sourcing advantageous for Healthcare duties .
  • Contact Centers pipeline and customer impact: Solar customer impact ~“a couple of million dollars” annualized; elongated decisions but “green shoots” emerging .
  • Q4 setup: Sales building month to month with December largest; sequential build anticipated primarily in Branded Products given strong bookings .
  • Cost savings: ~$4M y/y SG&A reduction in Q3; about half tied to cost savings program; previously targeted ~$13M annualized savings, with ~half against actuals .

Estimates Context

  • Q3 2025 results versus S&P Global consensus: revenue $138.5M vs $141.9M*, EPS $0.18 vs $0.183*, EBITDA $7.5M vs $8.09M*, with 3 estimates for revenue and EPS. Modest misses on revenue and EBITDA; EPS essentially in line *.
  • FY 2025 context: consensus revenue $564.8M*, normalized EPS $0.437*, average target price $16.67* (3 estimates) [—]*.

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Sequential improvement with disciplined cost control: SG&A fell ~$4M y/y; EBITDA and EPS improved q/q, positioning for operating leverage as demand normalizes .
  • Guidance credibility improved: FY revenue range tightened to $560–$570M, raising midpoint amid subdued macro; dividend maintained at $0.14 per share .
  • Tariff mitigation tangible: Branded Products leveraging alternative sourcing and domestic options; Healthcare price increases offset tariff impacts sequentially .
  • Near-term setup: Expect Q4 sequential build led by Branded Products; pipelines robust but conversion pace tied to macro certainty and trade policy stability .
  • Segment dynamics: Healthcare Apparel showing sequential gross margin improvement and DTC/retail footprint gains; Contact Centers margins pressured by mix and costs but pipeline “green shoots” emerging .
  • Liquidity supports optionality: >$100M liquidity with share repurchase capacity (~$12M), enabling selective M&A and continued capital return .
  • Trading implications: Post-print softness relative to revenue/EBITDA consensus is tempered by improved guidance midpoint and cost actions; watch tariff headlines and Q4 bookings conversion in Branded Products as primary stock catalysts * .

Appendix: Additional References

  • Q3 2025 8-K and press release: consolidated financials, segment details, dividend, guidance update .
  • Q3 2025 earnings call: segment commentary, margin trajectory, pipelines, Q&A .
  • Prior quarters (trend): Q2 2025 press release and call (segment growth, margins, credit reserve) ; Q1 2025 press release and call (guidance reset, cost savings plan) .