DA Davidson raised its price target on Superior Group of Companies (NASDAQ: SGC) to $15 from $14 on Tuesday, citing a second-quarter revenue beat that underscored the strength of the company's Branded Products segment.
Superior Group reported net sales of $147.8 million for the quarter ended June 30, 2026, up from $144.0 million a year earlier and above the consensus estimate of $142.9 million. Adjusted diluted earnings per share more than doubled to $0.21, surpassing the $0.10 consensus by $0.11. Adjusted EBITDA climbed 27% to $7.7 million from $6.1 million in the prior-year quarter.
The Branded Products segment drove the upside. Revenue rose 6% to $98 million on higher volumes from existing customers, while segment gross margin expanded to 36.5% and EBITDA increased 25%. Management noted a strong pipeline extending into 2027, though decision-making on requests for proposals remains slow.
Healthcare Apparel remained a drag. Segment revenue fell 4% to $27.2 million, and a $2.6 million non-cash tradename impairment charge pressured gross margin and reduced segment EBITDA by roughly $1 million. The company expects additional, though lesser, margin pressure in the second half before improvement in 2027.
Contact Centers showed sequential recovery for the second consecutive quarter, with net sales of $23.1 million. New customer conversions, additional agents, and cost efficiencies supported the improvement, and management expects continued sequential revenue and EBITDA-margin gains in the back half.