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View All NewsKelly’s Q2 revenue rises excluding APAC; fastest growth in Europe
Kelly Services Inc.’s (NASD: KELYA) second-quarter revenue rose 4% when adjusting for the transfer of its Asia pacific joint venture in the third quarter of 2016. Growth was fastest in the Europe, Middle East and Africa where revenue rose 8.7% on a constant currency basis.
Countries with the fastest growth included France, Russia and Ireland. On the other hand, revenue in Germany fell 3.7% on a constant currency basis, UK revenue rose 1.1% in constant currency and Swiss revenue was flat.
US revenue rose 4.2%, and revenue in the company’s Americas segment overall rose 3.8%. The company recorded 13.4% growth in Mexico and 9.2% growth in Brazil, both on a constant currency basis. Canadian revenue was up 1% in constant currency and Puerto Rican revenue fell 21.9%.
| (US$ millions) | Q2 2017 | Q2 2016 | % change | % constant currency |
| Revenue | $1,333.6 | $1,375.5 | -3.1% | -2.7% |
| Gross profit | $228.8 | $230.5 | -0.7% | -0.4% |
| Gross margin | 17.2% | 16.8% | ||
| Net earnings | $18.7 | $8.9 | 110.0% |
Revenue in Global Talent Solutions — includes the company’s recruitment process outsourcing, contingent workforce outsourcing, business process outsourcing and other services — revenue rose 0.2% on a constant currency basis.
Gross margin for the Troy, Mich.-based company improved to 17.6% from 17.0% in the second quarter of last year.
Net earnings jumped 53.3%; however, the second quarter of last year include restructuring charges of $3.4 million.
Quote
“It was a successful quarter that confirmed our strategic direction and continued Kelly’s forward momentum in the market,” said President and CEO George Corona. “Our performance demonstrates our sustained ability to grow the top line, operate more efficiently, and deliver solid returns to our shareholders — all while continuing to invest in the future.”
Revenue by segment
| (US$ millions) | Q2 2017 | Q2 2016 | % change | % constant currency |
| Americas staffing | $575.6 | $542.4 | 6.1% | 6.1% |
| Global talent solutions | $505.5 | $500.6 | 1.0% | 1.2% |
| Internaltional staffing | $256.8 | $337.3 | -23.9% | -22.8% |
Gross margin by segment
| Q2 2017 | Q2 2016 | |
| Americas staffing | 18.0% | 17.9% |
| Global talent solutions | 17.5% | 17.1% |
| International staffing | 14.3% | 14.4% |
Revenue by geography
| (US$ millions) | Q2 2017 | Q2 2016 | % change | % constant currency |
| Americas | ||||
| United States | $970.1 | $930.8 | 4.2% | 4.2% |
| Canada | $34.6 | $35.8 | -3.1% | 1.0% |
| Mexico | $28.3 | $25.4 | 11.0% | 13.4% |
| Puerto Rico | $17.6 | $22.5 | -21.9% | -21.9% |
| Brazil | $12.7 | $10.2 | 23.8% | 9.2% |
| Europe, Middle East and Africa | ||||
| France | $68.3 | $61.3 | 11.5% | 14.1% |
| Switzerland | $53.9 | $54.6 | -1.2% | - |
| Portugal | $41.7 | $38.7 | 7.4% | 10.1% |
| Russia | $24.0 | $16.6 | 44.4% | 25.9% |
| United Kingdom | $20.8 | $23.1 | -9.7% | 1.1% |
| Italy | $15.7 | $15.1 | 3.9% | 6.0% |
| Germany | $14.6 | $15.7 | -6.1% | -3.7% |
| Norway | $8.4 | $8.4 | -1.3% | 1.8% |
| Ireland | $7.4 | $5.4 | 36.0% | 39.3% |
| Other EMEA | $11.0 | $9.4 | 17.4% | 19.6% |
| Asia Pacific | ||||
| Total APAC | $4.5 | $102.5 | -95.6% | -95.6% |
Guidance
Kelly Services forecasts revenue to rise 4% to 5% in the third-quarter.
Share price and market cap
Shares in Kelly Services rose 4.31% to $22.99 in early afternoon trading. The company had a market cap of $879.15 million.