Third quarter sales were up 41.4% and diluted earnings per share of $0.39 were a new record for Superior Group of Companies. Even so, the parent company of Top 40 distributor BAMKO (asi/131431) reported that net income was down for the first nine months of the year, and that its promotional products business channel, while growing, performed below expectations.

Michael Benstock, CEO, Superior Group of Companies

In its latest earnings report, Superior Group said total company 2018 Q3 sales tallied $95.9 million, up from $67.8 million in the prior year’s third quarter. Sales beat analysts’ estimates of $92.4 million. Meanwhile, net income in the third quarter reached $6.1 million, or $0.39 per diluted share, thereby beating the consensus estimate of $0.36. Third quarter earnings represented an increase from Q3 2017’s $0.33 per diluted share on net income of $5 million.

Savvy acquisitions have helped drive growth. “The strategic benefits of our 2017 and 2018 acquisitions remain clear, and we are well-positioned for future sales and earnings growth as a result,” said Superior CEO Michael Benstock. “We remain focused on continuing to successfully integrate these businesses to provide additional sales and operational efficiencies across our company portfolio.”

In an official statement, Benstock said that performance in Superior Group’s uniforms division and promotional products segment, which includes BAMKO, Tangerine Promotions and Public Identity, wasn’t what the company expected. “While organic growth…was lower than anticipated, we are bullish on the long term outlook for these segments, and believe our current investments in these segments will provide significant returns for the company in the future,” Benstock said.

For the first nine months of 2018, Superior Group’s overall sales totaled about $251.35 million, up from about $194.4 million the previous year. Still, net income was down from $13.14 million during last year’s first nine months to about $12.4 million through Sept 30, 2018. Relatedly, earnings per diluted share during the same period dropped from $0.87 to $0.80. Superior had previously reported that earnings in Q2 this year were hurt by a pre-tax charge of approximately $1.6 million, or about $0.08 per diluted share, for expenses associated with an acquisition. 

The Office Gurus, Superior Group’s remote staffing segment, was a key part of the third quarter’s positive narrative. The segment grew sales more than 35% through new customer acquisition and existing customer sales.

During the quarter, Superior Group also hired Michael Attinella as its new chief financial officer. “We are thrilled to have someone with his background and proven experience join Superior’s leadership team,” said Benstock.