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View All NewsKelly Services Q4 revenue up 0.6% in constant currency; ‘challenging talent supply’ in US
Fourth-quarter revenue at Kelly Services (NASD: KELYA) rose 0.6% on a constant currency basis. However, revenue was down 0.5% on a reported basis. The Troy, Mich.-based staffing firm reported a “challenging talent supply environment” in the US. The company noted Americas staffing revenue reflects continuing growth in Kelly Educational Staffing partially offset by declines in commercial and PT specialties in the face of talent supply challenges in the US. In the company’s global talent solutions segment, higher revenue in outsourced solutions was offset declines in centrally delivered staffing and payroll process outsourcing. And international staffing revenue declined in Western Europe.
| (US$ millions) | Q4 2018 | Q4 2017 | % change | % constant currency |
| Revenue | $1,414.7 | $1,422.3 | -0.5% | 0.6% |
| Gross profit | $254.4 | $263.0 | -3.3% | -2.3% |
| Gross margin | 18.0% | 18.5% | ||
| Net earnings | ($23.9) | $17.7 | nm |
Revenue by segment
| (US$ millions) | Q4 2018 | Q4 2017 | % change | % constant currency |
| Americas staffing | $647.6 | $642.4 | 0.8% | 1.4% |
| Global talent solutions | $503.3 | $503.1 | - | 0.3% |
| International staffing | $268.1 | $282.2 | -5.0% | -1.4% |
Revenue by geography
| (US$ millions) | Q4 2018 | Q4 2017 | % change | % constant currency |
| Americas | ||||
| United States | $1,031.6 | $1,027.8 | 0.4% | 0.4% |
| Canada | $34.8 | $34.5 | 1.2% | 5.1% |
| Mexico | $32.3 | $33.8 | -4.4% | -0.1% |
| Puerto Rico | $22.4 | $17.1 | 31.0% | 31.0% |
| Brazil | $8.6 | $10.3 | -16.4% | 1.5% |
| Europe, Middle East and Africa | ||||
| France | $66.2 | $75.0 | -11.8% | -8.9% |
| Switzerland | $56.4 | $55.6 | 1.2% | 2.2% |
| Portugal | $46.4 | $52.0 | -10.7% | -7.8% |
| Russia | $24.7 | $23.9 | 2.9% | 17.2% |
| United Kingdom | $23.2 | $24.4 | -4.9% | -1.9% |
| Italy | $19.4 | $16.6 | 16.6% | 20.4% |
| Germany | $12.1 | $16.6 | -27.3% | -25.0% |
| Ireland | $10.3 | $8.6 | 20.5% | 24.3% |
| Norway | $8.0 | $8.4 | -4.0% | -0.7% |
| Other EMEA | $13.0 | $13.0 | 0.4% | 4.5% |
| Asia Pacific | ||||
| Total APAC | $5.3 | $4.7 | 12.4% | 20.7% |
Perm fees growth continued, although at a slower pace.
Kelly last month announced it sold its legal staffing business unit to Trustpoint.One. Kelly’s legal operations were branded as Kelly Legal Managed Services (formerly known as Kelly Law Registry). The deal includes Kelly’s entire legal staffing division, and the company will no longer provide legal staffing.
In January the company also made two engineering market acquisitions aimed at bolstering its presence in the 5G technology space: Global Technology Associates LLC, or GTA, and NextGen Global Resources LLC.
Quote
“The company delivered a good quarter and a solid year in a challenging labor market,” President and CEO George Corona said. “We are optimistic about 2019, knowing these strategic investments will help us capitalize on the expanding specialty talent solutions markets, where there are abundant opportunities for growth and increased profitability.”
For the full-year 2018, revenue increased 2.2% in constant currency, reflecting growth in Americas staffing and international staffing and flat results in Global Talent Solutions.
Full-year results
| (US$ millions) | 2018 | 2017 | % change | % constant currency |
| Revenue | $5,513.9 | $5,374.4 | 2.6% | 2.2% |
| Gross profit | $972.2 | $954.1 | 1.9% | 1.6% |
| Gross margin | 17.6% | 17.8% | ||
| Net earnings | $22.9 | $71.6 | -68.0% |
Guidance
The company expects full-year 2019 revenue to be up 3.5% to 5.5% year over year, with inorganic growth from recent acquisitions expected to add from 2% to 3% of revenue growth.
Share price and market cap
Kelly Services shares were down 1.09% to $23.52 at 9:39 a.m. Eastern time; the company had a market cap of $918.18 million, according to FT.com.