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View All NewsKelly’s Q1 revenue rises 3.5% in constant currency, Americas growth slowing
Kelly Services Inc.’s (NASD: KELYA) first-quarter revenue rose 3.5% on a constant currency basis. The company noted revenue reflects continued, but slowing, growth in the Americas, where revenue rose 5.0% in constant currency. International staffing revenue rose 8.9% in constant currency.
US revenue rose 2.0%. International staffing revenue rose 8.9% in constant currency in the first quarter; Italy, the UK and Ireland saw the largest year-over-year increases.
Meanwhile, revenue in the company’s Global Talent Solutions segment — which includes RPO, MSP, business process outsourcing and other services — fell 0.8% in constant currency.
First-quarter gross margin narrowed as a result of business mix in Americas staffing and customer mix in international staffing.
The year-ago quarter included $2.4 million in restructuring charges.
| (US$ millions) | Q1 2018 | Q1 2017 | % change | % constant currency |
| Revenue | $1,369.9 | $1,289.7 | 6.2% | 3.5% |
| Gross profit | $238.2 | $231.6 | 2.9% | 0.5% |
| Gross margin | 17.4% | 18.0% | ||
| Net earnings | $29.1 | $12.2 | 139.0% |
InGenesis Inc. last month closed its acquisition of the Kelly Healthcare Resources division of Kelly Services.
In February, TS Kelly Asia Pacific — a joint venture between Kelly Services Inc. (NASD: KELYA) and Japan-based staffing giant Persol Holdings — announced it is rebranding to PersolKelly and plans to triple its size across Asia Pacific by 2020.
Quote
“In the first quarter we saw top-line growth, robust growth in fees, and upward momentum in Outcome-Based Services,” President and CEO George Corona said. “As our growth in the first quarter was at a slower pace, we are closely monitoring market dynamics to ensure our expenses are in line with our expected revenue and GP growth. We will continue to focus on our strengths, make strategic investments in technology to connect with talent and customers like never before and pursue our strategy with urgency.”
Revenue by segment
| (US$ millions) | Q1 2018 | Q1 2017 | % change | % constant currency |
| Americas staffing | $604.3 | $573.1 | 5.4% | 5.0% |
| Global talent solutions | $485.8 | $487.3 | -0.3% | -0.8% |
| International staffing | $284.7 | $233.6 | 21.9% | 8.9% |
Gross margin by segment
| Q1 2018 | Q1 2017 | |
| Americas staffing | 17.9% | 18.4% |
| Global talent solutions | 18.9% | 18.6% |
| International staffing | 13.7% | 15.6% |
Revenue by geography
| (US$ millions) | Q1 2018 | Q1 2017 | % change | % constant currency |
| Americas | ||||
| United States | $974.7 | $955.6 | 2.0% | 2.0% |
| Canada | $33.6 | $34.1 | -1.4% | -5.9% |
| Mexico | $30.4 | $23.8 | 27.6% | 18.2% |
| Puerto Rico | $19.8 | $17.7 | 12.2% | 12.2% |
| Brazil | $9.5 | $13.3 | -29.1% | -28.1% |
| Europe, Middle East and Africa | ||||
| France | $71.9 | $60.8 | 18.4% | 2.6% |
| Portugal | $51.1 | $36.3 | 40.7% | 22.0% |
| Switzerland | $49.7 | $48.3 | 2.9% | -2.8% |
| United Kingdom | $29.0 | $20.2 | 43.8% | 28.0% |
| Russia | $26.1 | $22.8 | 14.6% | 11.4% |
| Italy | $20.5 | $13.7 | 49.7% | 29.7% |
| Germany | $16.4 | $13.2 | 24.8% | 8.2% |
| Ireland | $11.3 | $7.7 | 45.5% | 26.2% |
| Norway | $8.4 | $7.6 | 9.5% | 1.8% |
| Other EMEA | $12.4 | $10.4 | 19.6% | 3.7% |
| Asia Pacific | ||||
| Total APAC | $5.1 | $4.2 | 19.9% | 14.7% |
Guidance
Kelly Services forecasts revenue to rise by between 5.5% and 6.5% for the full year 2018.
Share price and market cap
Shares in Kelly Services fell 19.66% to $24.70 as of 12:41 p.m. Eastern time. The company had a market cap of $944.58 million.