Company Performance - Superior Group (SGC) shares decreased by 2.5% to $9.74, underperforming the S&P 500's loss of 0.22% on the same day [1] - Over the past month, SGC shares appreciated by 1.32%, outperforming the Consumer Discretionary sector's loss of 0.1% and the S&P 500's gain of 0.45% [1] Upcoming Earnings - Analysts expect Superior Group to report earnings of $0.07 per share, indicating a year-over-year growth of 75% [2] - The consensus estimate for quarterly revenue is $135.03 million, reflecting a 2.5% increase from the previous year [2] Full-Year Estimates - Zacks Consensus Estimates project full-year earnings of $0.49 per share and revenue of $559.79 million, representing year-over-year declines of 32.88% and 1.04%, respectively [3] Analyst Forecast Revisions - Recent revisions to analyst forecasts for Superior Group are important as they reflect short-term business trends [4] - Positive estimate revisions are viewed as a sign of optimism regarding the business outlook [4] Zacks Rank and Performance - The Zacks Rank system currently rates Superior Group as 4 (Sell), with the consensus EPS estimate decreasing by 13.6% over the past month [6] - Historically, 1 ranked stocks in the Zacks Rank system have yielded an average annual return of +25% since 1988 [6] Valuation Metrics - Superior Group has a Forward P/E ratio of 20.28, which is higher than the industry average Forward P/E of 13.65 [7] - The company's PEG ratio stands at 2.03, compared to the industry average PEG ratio of 1.98 [8] Industry Context - The Textile - Apparel industry, part of the Consumer Discretionary sector, holds a Zacks Industry Rank of 208, placing it in the bottom 16% of over 250 industries [9] - Research indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [9]

Core Viewpoint - The article discusses the reliability of Wall Street analysts' recommendations, particularly focusing on Superior Group (SGC), and highlights the potential misalignment of brokerage firms' interests with those of retail investors [1][5][10]. Group 1: Brokerage Recommendations - Superior Group currently has an average brokerage recommendation (ABR) of 1.00, indicating a Strong Buy, based on recommendations from four brokerage firms, all of which are Strong Buy [2][4]. - Despite the Strong Buy ABR, relying solely on this information for investment decisions may not be advisable, as studies show brokerage recommendations often fail to guide investors effectively [5][10]. Group 2: Analyst Bias and Zacks Rank - Analysts from brokerage firms tend to exhibit a strong positive bias in their ratings, with five "Strong Buy" recommendations for every "Strong Sell" recommendation, which may mislead investors [6][10]. - The Zacks Rank, a proprietary stock rating tool, categorizes stocks based on earnings estimate revisions and is considered a more effective indicator of near-term stock price performance compared to ABR [8][11]. Group 3: Earnings Estimates and Current Outlook - The Zacks Consensus Estimate for Superior Group has declined by 13.6% over the past month to $0.49, indicating growing pessimism among analysts regarding the company's earnings prospects [13]. - This decline in earnings estimates has resulted in a Zacks Rank of 4 (Sell) for Superior Group, suggesting that the previously favorable ABR should be viewed with caution [14].

Summary of Superior Group of Companies (SGC) Conference Call - June 12, 2025 Company Overview - **Company**: Superior Group of Companies (SGC) - **CEO**: Michael Benstock - **CFO**: Mike Kempel - **Established**: Over 100 years ago, with Michael Benstock serving as CEO for 22 years [2][3] Industry Segments 1. **Health Care Apparel** - Largest and oldest provider of health care apparel in the U.S. - Serves approximately 12 million health care professionals [6][9] - Total Addressable Market (TAM) estimated at over $4 billion, with significant growth potential [10] - Strong brands include Wink and Fashion Seal Healthcare [8][9] 2. **Branded Products** - Provides promotional products and logo uniforms to major companies [12] - Industry size estimated at $26 billion with 25,000 competitors [15] - Notable clients include Taco Bell, Dunkin', and Tesla [13][14] 3. **Contact Center Services** - Operates as The Office Gurus, focusing on small to medium-sized businesses [19] - Fastest growing segment with a five-year sales CAGR of almost 22% [23] - Recognized for quality customer service and high customer retention [21][22] Financial Highlights - **Revenue Growth**: SGC has achieved an annualized growth rate of 11% across all segments [24] - **Cash Flow**: Positive free cash flow and reduced working capital and debt, with a net leverage ratio decreased by over 50% since 2022 [25] - **Dividend**: Consistent dividend payments since 1977, with discussions on future increases based on performance [26][54] Strategic Initiatives - **Market Share Expansion**: Focus on omnichannel strategies, including direct-to-consumer sales, to capture more market share in health care apparel [39][40] - **Capital Allocation**: Active share repurchase program with a recent authorization of up to $17.5 million [44] - **Acquisitions**: Plans for strategic acquisitions in branded products and contact center markets [46] Challenges and Opportunities - **Tariff Impact**: Health care apparel business is largely unaffected by tariffs, while branded products may see some pricing adjustments [30][31] - **Employee Retention**: Gifting remains a key strategy for customer loyalty despite budget constraints [35][36] - **Technological Investment**: Significant investment in AI technology to enhance service offerings in contact centers [47] Customer Relationships - Long-standing contracts with major brands like Walmart and CVS, indicating high customer retention and stickiness [50][53] Conclusion - SGC is well-positioned for growth across its diversified business segments, with strong financial health and strategic initiatives aimed at capturing market share and enhancing customer relationships [24][25][39]

Company Overview - Superior Group of Companies, Inc. (SGC) was established in 1920 and operates in three business segments: Healthcare Apparel, Branded Products, and Contact Centers, which serve large, fragmented, and growing markets [2] - The company focuses on creating extraordinary brand engagement experiences for customers and employees through its commitment to service, quality, advanced technology, and omnichannel commerce, providing it with competitive advantages [2] - SGC aims to enhance shareholder value by pursuing a combination of organic growth and strategic acquisitions [2] Upcoming Events - The Chairman, President, and CEO, Michael Benstock, along with CFO Mike Koempel, will participate in a fireside chat at the Sidoti Virtual Investor Conference on June 12, 2025, at 9:15 AM Eastern Time [1] - A live webcast and replay of the event will be available on the company's Investor Relations website [1] - Management will also host virtual meetings throughout the day of the conference [1]

Group 1 - Superior Group of Companies, Inc. will participate in the Inaugural D.A. Davidson Technology & Consumer Conference on June 10, 2025, in Nashville, TN, with investor meetings scheduled throughout the day [1] - The company operates in three business segments: Healthcare Apparel, Branded Products, and Contact Centers, which serve large, fragmented, and growing addressable markets [1] - Superior Group of Companies emphasizes its commitment to service, quality, advanced technology, and omnichannel commerce, providing competitive advantages [1] Group 2 - The company aims to enhance shareholder value through a combination of organic growth and strategic acquisitions [1]

Group 1 - Superior Group of Companies, Inc. will participate in the Noble Capital Markets 2025 Emerging Growth Virtual Equity Conference on June 5, 2025 [1] - The company's Chairman, President, and CEO Michael Benstock, along with CFO Mike Koempel, will be featured in a fireside chat during the event [1] - A video replay of the presentation will be available on the company's Investor Relations website after the event [1] Group 2 - Superior Group of Companies was established in 1920 and operates in three business segments: Healthcare Apparel, Branded Products, and Contact Centers [2] - Each segment targets large, fragmented, and growing addressable markets, enhancing brand engagement experiences for customers and employees [2] - The company focuses on organic growth and strategic acquisitions to enhance shareholder value [2]

Group 1 - Superior Group of Companies, Inc. (SGC) will participate in the Barrington Research Spring Investment Conference on May 29, 2025, with virtual investor meetings hosted by CEO Michael Benstock and CFO Mike Koempel [1] - Established in 1920, Superior Group of Companies operates in three business segments: Healthcare Apparel, Branded Products, and Contact Centers, targeting large and growing markets [2] - The company focuses on enhancing shareholder value through a combination of organic growth and strategic acquisitions, emphasizing service, quality, advanced technology, and omnichannel commerce as competitive advantages [2]

Financial Performance - Superior Group reported a quarterly loss of $0.05 per share, missing the Zacks Consensus Estimate of $0.11, and down from earnings of $0.24 per share a year ago, representing an earnings surprise of -145.45% [1] - The company posted revenues of $137.1 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 1.14%, and down from $138.84 million year-over-year [2] - Over the last four quarters, Superior Group has surpassed consensus EPS estimates only once and has topped consensus revenue estimates just once [2] Stock Performance - Superior Group shares have declined approximately 38.2% since the beginning of the year, compared to a decline of -4.3% for the S&P 500 [3] - The current Zacks Rank for Superior Group is 5 (Strong Sell), indicating expectations for the stock to underperform the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.12 on revenues of $137.84 million, and for the current fiscal year, it is $0.76 on revenues of $584.83 million [7] - The estimate revisions trend for Superior Group is currently unfavorable, which may change following the recent earnings report [6] Industry Context - The Textile - Apparel industry, to which Superior Group belongs, is currently ranked in the bottom 22% of over 250 Zacks industries, indicating potential challenges for stock performance [8] - Lululemon, another company in the same industry, is expected to report quarterly earnings of $2.60 per share, reflecting a year-over-year change of +2.4% [9]

Financial Data and Key Metrics Changes - The company reported a first quarter net loss per share of $0.05 compared to earnings per diluted share of $0.24 in the prior year period, primarily due to lower gross margins from sales mix changes [8][16] - Consolidated first quarter revenues were down 1% year over year, with a strong balance sheet and net leverage position allowing for a strategic long-term approach to capital allocation [12][17] - Gross margin rate was 36.8% for the first quarter, down from 39.8% in the prior year [14] Business Segment Data and Key Metrics Changes - Branded Products revenue was off less than 1%, with promotional products growing while branded uniform sales declined due to stronger rollouts in the previous year [13] - Healthcare Apparel revenue decreased by 7% year over year, reflecting a decline in Institutional Healthcare Apparel [13] - Contact Center business segment grew revenue by 3%, benefiting from solid retention and growth of existing customers [13] Market Data and Key Metrics Changes - The company noted customer buying hesitancy due to inflation, interest rates, and tariffs, which have slowed decision-making and sourcing challenges [5][6] - The company has a diversified sourcing strategy that mitigates risks associated with high tariffs on products from China [6][9] Company Strategy and Development Direction - The company is focused on strong cost management and has eliminated costs to support profitability as demand normalizes [7][8] - The company plans to invest in growing digital channels and expanding market share in the healthcare apparel segment [11] - The company is actively repurchasing shares, considering it a compelling value, while maintaining significant liquidity for growth [9][17] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism for Q2, citing a strong order backlog and customer retention over 90% [10] - The company anticipates revenue for the full year to be in the range of $550 million to $575 million, reflecting a conservative approach due to economic uncertainty [18] - Management emphasized a proven track record of navigating challenging economic times and maintaining a strong position relative to competitors [18] Other Important Information - The company has executed approximately $13 million in annualized savings, primarily within SG&A expenses, to enhance operational efficiency [44][53] - The company ended the first quarter with $20 million in cash and cash equivalents, up from $19 million at the start of the year [16] Q&A Session Summary Question: Discussion on the pipeline in branded products and contact centers - Management highlighted strong pipelines in both segments, with aggressive recruitment and positioning as experts in navigating tariff challenges [21][23] Question: Reduced revenue guidance and conservatism in the second half - Management confirmed a cautious approach while still expecting a ramp-up in the second half, managing costs conservatively [30] Question: Cost perspective on tariffs and price increases - Management indicated the ability to pass on tariff-related costs to customers, with flexibility in pricing strategies [31][32] Question: Impact of tariffs on customer behavior and supply chain disruptions - Management noted that even if tariffs were lifted, it would take time to return to normalcy due to supply chain disruptions [40][43] Question: Insights on SG&A savings and operational efficiencies - Management confirmed that the $13 million in savings would not impact growth and would begin to benefit in the second quarter [44][53] Question: Acquisition opportunities in the current environment - Management is currently conserving cash and not pursuing acquisitions until there is more clarity on tariffs, but sees potential opportunities in the future [55][56]

Financial Data and Key Metrics Changes - The company reported a consolidated first quarter revenue decline of 1% year over year, holding revenue nearly flat despite macroeconomic headwinds [7][12] - The net loss per share for the first quarter was $0.05, compared to earnings per diluted share of $0.24 in the prior year period, primarily due to lower gross margins from sales mix changes [7][16] - Consolidated EBITDA decreased to $3.5 million from $9.6 million a year earlier, reflecting the impact of lower revenues and margins [13] Business Segment Data and Key Metrics Changes - In the Branded Products segment, revenue was down less than 1%, with promotional products growing while branded uniform sales declined due to stronger rollouts in the previous year [12][8] - Healthcare Apparel revenue fell by 7% year over year, primarily due to a decline in Institutional Healthcare Apparel [12] - The Contact Center segment grew revenue by 3%, benefiting from solid retention and growth of existing customers [12] Market Data and Key Metrics Changes - The company noted that customer buying hesitancy persisted due to inflation, interest rates, and tariffs, particularly affecting sourcing challenges [5][6] - The company maintained a strong balance sheet with $20 million in cash and cash equivalents, up from $19 million at the start of the year [16] Company Strategy and Development Direction - The company is focused on strong cost management and has eliminated approximately $13 million in annualized budget expenses to enhance profitability as demand normalizes [18] - The company is leveraging its diversified business segments and multiple sources of supply to navigate economic uncertainties [6][5] - The company aims to capitalize on market dislocations by actively repurchasing common shares, considering it a compelling value [8] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism for Q2, citing a strong order backlog and customer retention over 90% [9] - The company anticipates revenue for the full year to be in the range of $550 million to $575 million, reflecting a conservative outlook due to economic uncertainties [17][18] - Management emphasized a proven track record of navigating challenging economic times and maintaining significant liquidity to support growth [18] Other Important Information - The company has a net leverage ratio of 2.2 times trailing twelve months covenant EBITDA, which is within covenant requirements [17] - The company is exploring acquisition opportunities but is currently focused on conserving cash until there is more clarity regarding tariffs [53] Q&A Session Summary Question: Discussion on the pipeline in branded products and contact centers - Management highlighted strong pipelines in both segments, with aggressive recruitment and positioning as experts in navigating tariff challenges [21][23] Question: Reduced revenue guidance and conservatism in the second half - Management confirmed a cautious approach due to current uncertainties but expects a ramp-up in the second half [30] Question: Cost perspective on tariffs and price increases - Management stated they can pass on tariff increases to most customers and are actively managing pricing strategies [31][33] Question: Impact of tariffs on customer behavior and supply chain disruptions - Management noted that even if tariffs were lifted, it would take 6 to 9 months for supply chains to normalize due to disruptions [39][41] Question: Annualized cost savings and operational efficiencies - Management confirmed $13 million in annualized savings primarily from SG&A expense reductions, which will begin to impact the second quarter [43][51] Question: Acquisition opportunities and focus areas - Management is currently conserving cash and will only consider acquisitions that are immediately accretive and at the right price [53][54] Question: Price elasticity of branded products and profitability - Management indicated flexibility in pricing strategies to recoup tariff costs while maintaining market share [58][62]