October 19, 2023
ManpowerGroup, Inc. (NYSE:MAN) reported a challenging business environment in the United States and Europe in today’s earnings release. The global staffing agency reported that revenue decreased by 5.4% year-on-year excluding the impact of currency fluctuations and gross profit contracted.
US sales decreased 15.1%.
ManpowerGroup Chairman and CEO Jonas Prijsing said on a conference call with analysts that the company “shared that broader economic pressures were building during the last quarter, particularly in North America and Europe.” Ta. “Over the past few months, we have seen these pressures increase as global manufacturing output declines and services activity slows. We also see a period of strength in hiring and investment post-pandemic. As a result, hiring was suppressed in some industries as companies paused new hiring and spending.
Still, ManpowerGroup reported solid demand in its Middle East operations in Latin America and Asia Pacific.
Total revenue for the third quarter was at the midpoint of the company’s constant currency range, and gross margin exceeded guidance.
However, the third quarter included restructuring charges of $38.1 million, of which $6.0 million was incurred in the Americas, $3.8 million in Southern Europe, $27.5 million in Northern Europe, and $0.8 million in Asia Pacific and the Middle East. doing.
Revenue by business field
- The company’s Manpower segment revenue decreased 3% year over year on an organic basis, excluding the impact of currency fluctuations.
- Experis, the company’s IT staffing and services division, reported a 10% decline in revenue on a constant currency, organic basis.
- Talent Solutions revenue decreased 14% organically at constant currency.
“The decline in Experis represents a decline in activity in both our enterprise and convenience customer segments,” Jack McGinniss, executive officer and chief financial officer, said on a conference call with analysts. “Demand from enterprise technology clients remained weak.”
McGinniss continued, “At Talent Solutions, we experienced a significant year-over-year decline in RPO revenue and expect activity to continue to slow starting in the second quarter. Our MSP business is a low-margin business. Although revenue decreased in the quarter due to reductions in certain activities, Right Management achieved significant year-over-year revenue growth due to increased outplacement volumes in the quarter, with revenue levels increasing from the second quarter. It was pretty stable.”
ManpowerGroup also mentioned the Israeli war in its earnings call, with Prising expressing sadness over the devastating terrorist attack and new conflict.
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guidance
ManpowerGroup’s forecast for the fourth quarter is as follows:
- Total revenue expected to decline 3% to 7% (4% to 8% excluding currency)
- Americas revenue expected to decline 7% to 11% (down 3% to 7% excluding currency effects)
- Sales in Southern Europe expected to be down 1% to 5% (down 4% to 8% excluding currency)
- Sales in Northern Europe expected to decline by 4% to 8% (down 6% to 10%)
- Sales in Asia Pacific and the Middle East are expected to decline by 5% to 9% (down 2% to 6% excluding currency fluctuations)
- Gross profit margin, 17.3% to 17.5%
stock price
ManpowerGroup stock fell 4.3% to $68.15 as of 11:41 a.m. ET today. According to FT.com, the stock hit $67.35 today, a new 52-week low.
