Overview

• US merchandising services firm's Q1 revenue fell 10% yr/yr due to lower Remodel activity

• Gross margin improved to 22.3% from 21.4% as business shifted to higher-margin merchandising

• Adjusted EPS turned negative as company transitioned away from lower-margin work

Outlook

• SPAR Group reiterates 2026 net sales guidance of $143 mln to $151 mln for U.S. and Canada

• Company sees 2026 gross margins of 20.5% to 22.5% for U.S. and Canada

• SPAR targets 25% gross margins over next 18-24 months

Result Drivers

• SERVICE MIX SHIFT - Gross margin improved as company reduced lower-margin Remodel activity and grew higher-margin merchandising revenue

• COST CONTROL - SG&A expenses declined on a normalized run-rate basis as part of ongoing efficiency efforts

• CASH FLOW IMPACT - Operating cash flow was affected by higher accounts receivable from merchandising growth

Company press release: ID:nGNX9Q9XHt

Key Details

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