Spar Group 2024 Q4 Earnings Misses Targets with Net Income Down 1824.7%

Spar Group (SGRP) reported its fiscal 2024 Q4 earnings on May 16th, 2025. The total revenue of Spar Group decreased by 49.2% to $33.04 million in 2024 Q4, down from $65.10 million in 2023 Q4. The company missed expectations with a significant decline in revenue and net income. Guidance indicates a projected revenue target of approximately $35 million for Q1 2025 and an expected EPS of -$0.10. Spar Group's management remains cautiously optimistic about achieving a return to profitability by the end of 2025.

Revenue

The total revenue of Spar Group decreased by 49.2% to $33.04 million in 2024 Q4, down from $65.10 million in 2023 Q4.

Earnings/Net Income

Spar Group swung to a loss of $0.57 per share in 2024 Q4 from a profit of $0.09 per share in 2023 Q4 (720.1% negative change). Meanwhile, the company reported a net loss of $-13.71 million in 2024 Q4, reflecting a 1824.7% deterioration from the net income of $795,000 achieved in 2023 Q4. The EPS is notably poor given the substantial net income decline.

Price Action

The stock price of Spar Group has edged up 0.94% during the latest trading day, has edged up 2.38% during the most recent full trading week, and has edged down 2.27% month-to-date.

Post-Earnings Price Action Review

The strategy of purchasing SGRP shares following a revenue drop on the financial report release date and holding for 30 days has shown promising results over the past five years. Backtested data indicates a robust performance, with an annualized return of 14.5% and a total profit of $2.8 million. This suggests that investors could have achieved substantial gains by leveraging financial report release events for investment decisions. Despite recent challenges, this strategy highlights potential opportunities for investors who can capitalize on market reactions to earnings announcements.

CEO Commentary

Mark Schreiber, CEO of Spar Group, expressed confidence in the company's performance despite recent challenges. He highlighted that the revenue for Q4 2024 reached $33.04 million, driven by strategic investments in key markets. Schreiber noted the ongoing focus on enhancing operational efficiency and expanding market share, which are central to their growth strategy. He acknowledged the difficulties faced in the current economic climate but emphasized the importance of adaptability in navigating these challenges. The leadership remains cautiously optimistic about future opportunities, reinforcing their commitment to delivering shareholder value through the disciplined execution of their strategic priorities.

Guidance

Spar Group anticipates a revenue target of approximately $35 million for Q1 2025, with an expected EPS of -$0.10. The company plans to maintain its investment in technology and workforce development, aiming for improved operational performance. Additionally, management guides for a gradual recovery in net income, projecting a return to profitability by the end of 2025. The leadership is focused on achieving these targets while navigating market uncertainties and capitalizing on emerging opportunities in their sector.

Additional News

Spar Group has been actively engaged in merger and acquisition activities. Highwire Capital confirmed its commitment to the acquisition of Spar Group in an all-cash transaction, which was approved by stockholders in October 2024. The merger is expected to result in Spar Group becoming a privately held company. Additionally, Spar Group has faced challenges with timely financial filings, receiving a notice from Nasdaq for late filing of its 2024 Form 10-K. Despite these hurdles, the company is actively working to complete its filings and meet compliance requirements. The leadership remains focused on strategic growth and operational efficiencies to enhance shareholder value.