On August 6, 2024, Superior Group Of Companies Inc (SGC, Financial) released its 8-K filing detailing its second quarter 2024 financial results. Superior Group Of Companies Inc designs apparel products and operates through three segments: Branded Products, Healthcare Apparel, and Contact Centers, with the Branded Products segment generating the maximum revenue.
Performance Overview
For the second quarter ended June 30, 2024, Superior Group Of Companies Inc reported net sales of $131.7 million, a 2.0% increase from $129.2 million in the same period last year. However, net income declined to $0.6 million, or $0.04 per diluted share, compared to $1.2 million, or $0.08 per diluted share, in the second quarter of 2023. This performance fell short of analyst estimates, which projected earnings per share of $0.11 and revenue of $136.42 million.
Financial Achievements and Challenges
Despite the revenue growth, Superior Group Of Companies Inc faced challenges in maintaining profitability. The company's EBITDA decreased to $5.6 million from $7.4 million in the prior year’s second quarter. The decline in net income and EBITDA highlights the pressure on margins, possibly due to increased selling and administrative expenses, which rose to $48.4 million from $43.4 million in the previous year.
“We delivered a second consecutive quarter of revenue growth along with robust free cash flow, continuing our commitment to maintaining a strong financial position,” said Michael Benstock, Chief Executive Officer.
Income Statement Highlights
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Net Sales | $131.7 million | $129.2 million |
| Cost of Goods Sold | $81.0 million | $81.6 million |
| Selling and Administrative Expenses | $48.4 million | $43.4 million |
| Net Income | $0.6 million | $1.2 million |
| Net Income per Share (Diluted) | $0.04 | $0.08 |
Balance Sheet and Cash Flow
Superior Group Of Companies Inc's balance sheet and cash flow statements indicate a stable financial position. The company reported robust free cash flow, which is crucial for sustaining operations and funding future growth initiatives. The Board of Directors approved a quarterly dividend of $0.14 per share, reflecting confidence in the company's long-term prospects.
Full-Year Outlook
Despite the mixed results, Superior Group Of Companies Inc maintained its full-year outlook. The company expects full-year sales to range between $563 million and $570 million, with earnings per diluted share forecasted between $0.73 and $0.79. This outlook suggests optimism for stronger performance in the second half of the year.
“While second quarter results were below our expectations, we are poised to generate stronger performance in the second half of the year and are maintaining our full-year outlook,” added Benstock.
In conclusion, Superior Group Of Companies Inc's second quarter results reflect both growth and challenges. The increase in revenue is a positive sign, but the decline in net income and EBITDA underscores the need for improved cost management. Investors will be keenly watching the company's performance in the upcoming quarters to see if it can meet its full-year targets and enhance shareholder value.
Explore the complete 8-K earnings release (here) from Superior Group Of Companies Inc for further details.
