Superior Group of Companies, Inc.

Second-quarter consolidated revenue was $148 million, up 3% year over year. Gross margin was 38%, down 40 basis points from the prior-year quarter, while SG&A improved to 34.7% of sales, down 160 basis points year over year. EBITDA was $7.7 million, up from $6.1 million, and net income was $1.2 million, or $0.08 per diluted share; adjusted net income was $3.1 million, or $0.21 per diluted share, versus $1.6 million, or $0.10 per diluted share a year ago. By segment, Branded Products revenue rose 6% to $98 million, Healthcare Apparel revenue fell 4% to $27 million, and Contact Centers revenue fell 4% to $23 million. Full-year 2026 guidance remains net sales of $572 million to $585 million and adjusted diluted EPS of $0.54 to $0.66.

Michael Benstock characterized the quarter as strong and said the business is benefiting from diversification, solid customer relationships, and the ability to serve customers with technology, supply chain flexibility, and service. He was upbeat on Branded Products’ backlog and pipeline, but candid that Healthcare Apparel is going through a necessary transition toward a narrower, more focused assortment. His tone was constructive and confident, emphasizing that the company sees clear opportunities for both growth and margin expansion.

Mike Koempel detailed the drivers behind the quarter: Branded Products revenue of $98 million, Healthcare Apparel revenue of $27 million, Contact Centers revenue of $23 million, and gross margin of 38%. He pointed to the $2.6 million noncash impairment tied to Healthcare Apparel inventory/write-down and said the charge does not affect cash or operating cash flow. He also noted net interest expense improved to $981,000 from $1.25 million last year, the company ended the quarter with $23 million of cash and equivalents, generated $18 million of operating cash flow in the first half, paid $2.2 million in dividends, and had about $9 million available under its repurchase authorization.

Analysts focused on three themes: when Healthcare Apparel’s assortment changes might translate into revenue and margin improvement, how much more upside remains in Contact Centers, and whether Branded Products might merit acquisition-led growth. Management said Healthcare Apparel should see some margin pressure through the rest of 2026, with improvements beginning in 2027, while Contact Centers should continue sequential improvement as new customer conversion and existing-customer expansion carry into Q3 and Q4. On Branded Products, management said it is gaining share organically and is only interested in acquisitions that are clearly additive, with a particular emphasis on adjacent capabilities and digital.