Superior Group of Companies (NASDAQ:SGC) reported fourth-quarter 2025 results that management said reflected solid execution in a challenging macro environment, highlighted by modest revenue growth and a sharper improvement in profitability. On the call, CEO Michael Benstock and President and CFO Mike Koempel pointed to cost controls, efficiency initiatives, and growth in the company’s Branded Products segment as key drivers of stronger bottom-line performance.
Fourth-quarter results show profit leverage despite modest sales growth
Koempel said consolidated revenue in the fourth quarter totaled $147 million, up 1% year-over-year and up 6% sequentially, which management described as consistent with the “back-end weighted” cadence of the business. Benstock said the company lowered expenses despite growth, contributing to a 19% increase in EBITDA versus the year-ago quarter.
Gross margin was 36.9% compared to 37.1% in the prior-year quarter. Koempel also highlighted SG&A improvements: consolidated SG&A declined about $1.4 million year-over-year, with SG&A as a percentage of sales improving to 33.2% from 34.4%.
Segment performance: Branded Products growth offsets declines elsewhere
Management attributed the quarter’s revenue growth primarily to Branded Products, while Healthcare Apparel and Contact Centers posted year-over-year declines.
- Branded Products: Revenue increased 5% year-over-year to $97 million. Koempel said the growth was driven primarily by revenue contributions from the 3Point acquisition completed in December 2024, along with modest organic growth. Sequentially, segment revenue rose by more than $10 million. Benstock noted order patterns were affected during the year by a “challenging tariff environment,” but said the pipeline and backlog remained solid and had already produced “some large new wins” early in 2026. Branded Products gross margin improved 50 basis points year-over-year to 34.4% despite higher tariffs.
- Healthcare Apparel: Revenue declined to $29 million from $30 million, which management attributed to macro uncertainty impacting both wholesale-related consumer channels and institutional healthcare apparel. Gross margin was 33.6%, down 10 basis points. Benstock said SG&A declined slightly year-over-year despite continued marketing investments, supporting a positive EBITDA outcome for the segment. In Q&A, Koempel said Wink and the company’s Carhartt license continued to show “significant growth,” largely in direct-to-consumer but also with wholesale customers, though the segment experienced some softness in the fourth quarter with “a couple of customers.”
- Contact Centers: Revenue fell to $22 million from $24 million, driven by customer losses and reductions that outweighed new customer gains. Gross margin declined about 2 percentage points to 52.6% due to higher agent costs and a change in revenue mix after the July closure of the company’s lower-cost Jamaica center. Benstock said the company reduced Contact Centers SG&A by nearly $1 million, or 10%, aided by streamlining and “the strategic use of AI.”
Management cites uncertainty, but points to pipelines and early 2026 wins
Benstock said customers across the company’s business lines continued to operate under economic and geopolitical uncertainty, impacting decision-making and the “deal closing velocity” for new business. He said the company’s efficiency efforts and cost containment should position it well when demand improves.
In Contact Centers, Koempel said the company began 2026 with “early momentum” from a few pipeline conversions and described the outlook as “cautiously optimistic.” He said management expected meaningful benefits beginning in the latter part of the second quarter and growth in the back half of 2026, while also noting improved stability in the existing customer base compared with 2025, when bankruptcy-related issues affected results.
In Branded Products, Jake Himelstein, president of the segment, said fourth-quarter performance reflected multiple factors, including recruiting additional salespeople, program wins, and strong seasonal demand tied to employee holiday gifting. Himelstein said the company is actively balancing efforts to expand share of wallet with existing customers while also pursuing new logos through RFP activity, adding that the RFP pipeline exiting the quarter was “meaningfully higher” than the same period last year and skewed toward larger enterprise clients.
Balance sheet, capital returns, and buyback emphasis
Koempel said the company ended the year with $24 million in cash and cash equivalents, up $5 million versus the start of the year, and generated $20 million in operating cash flow in 2025. Total liquidity, including cash and revolver availability, was “over $100 million,” and the company remained in covenant compliance.
During the fourth quarter, Koempel said Superior Group paid $2 million in dividends and spent another $2 million to repurchase shares. The company ended the year with about $10 million remaining under its share repurchase authorization. In closing remarks, Benstock reiterated management’s view that the stock was “grossly undervalued” and said the company would continue buying back shares, describing it as being in shareholders’ best interests.
2026 guidance: modest revenue growth, improved earnings expected
For 2026, Koempel provided initial guidance calling for revenue of $572 million to $585 million, which he said assumes “no significant change in macro conditions due to geopolitical or other events” and implies up to 3% growth at the high end. The company guided to diluted EPS of $0.54 to $0.66, compared with $0.46 in 2025. Management again emphasized expectations for a back-end weighted year for both revenue and earnings.
When asked about the drivers of expected EPS improvement relative to revenue growth, Koempel cited anticipated gross margin improvement across segments, some SG&A improvement, and lower interest expense. He also said the company expected continued working capital improvement, including opportunities to reduce inventory levels, which could support cash flow and lower debt.
About Superior Group of Companies (NASDAQ:SGC)
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.
