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View All NewsKelly’s Q4 revenue rises 7.3% in constant currency
Kelly Services Inc.’s (NASD: KELYA) fourth-quarter revenue rose 7.3% on a constant currency basis. Growth was fastest in the Asia Pacific region, where revenue rose 13.0% in constant currency.
| (US$ millions) | Q4 2017 | Q4 2016 | % change | % constant currency |
| Revenue | $1,422.3 | $1,304.4 | 9.0% | 7.3% |
| Gross profit | $263.0 | $228.0 | 15.4% | 13.7% |
| Gross margin | 18.5% | 17.5% | ||
| Net earnings | $17.7 | $19.8 | -2.1% | -10.8% |
In the Americas, Mexico posted the fasted revenue growth at 15.5%, followed by the US at 7.4%. Meanwhile, revenue declined in Brazil, Puerto Rico and Canada.
Net earnings fell in both the fourth quarter and the full year, by 10.8% and 40.8%, respectively. During the third quarter of 2016, Kelly transferred its APAC staffing operations to the TS Kelly Asia Pacific joint venture, which negatively affected revenue comparisons for the full year. Kelly retains a 49% ownership interest in the joint venture. Kelly recorded a pre-tax gain of $87.2 million on the investment in 2016.
Quote
“Our fourth quarter performance reinforces that 2017 was a successful year of focus and acceleration for Kelly,” said President and CEO George Corona. “We created and carried strong momentum through all four quarters, grew the top line, improved our GP and conversion rate, and increased our earnings from operations by 32% over last year — all while accelerating investments that position Kelly for long-term growth.”
Revenue by segment
| (US$ millions) | Q4 2017 | Q4 2016 | % change | % constant currency |
| Americas staffing | $642.4 | $576.9 | 11.4% | 10.9% |
| Global talent solutions | $503.1 | $490.6 | 2.6% | 2.2% |
| International staffing | $282.2 | $241.5 | 16.9% | 9.1% |
Gross profit margin improved to 18.5% from 17.7% for the company as a whole in the fourth quarter. In the Americas staffing segment, the increase in gross margin to 18.9% from 18.3% comes from both strong top-line growth and gross profit rate improvement from lower employee benefits costs and higher perm fees, according to the company.
Gross margin by segment
| Q4 2017 | Q4 2016 | |
| Americas staffing | 18.9% | 18.3% |
| Global talent solutions | 20.2% | 18.1% |
| International staffing | 14.5% | 14.5% |
Revenue by geography
| (US$ millions) | Q4 2017 | Q4 2016 | % change | % constant currency |
| Americas | ||||
| United States | $1,027.8 | $956.7 | 7.4% | 7.4% |
| Canada | $34.5 | $34.5 | -0.1% | -5.0% |
| Mexico | $33.8 | $28.0 | 20.9% | 15.5% |
| Puerto Rico | $17.1 | $18.3 | -6.6% | -6.6% |
| Brazil | $10.3 | $13.3 | -22.8% | -24.6% |
| Europe, Middle East and Africa | ||||
| France | $75.0 | $61.1 | 22.7% | 12.3% |
| Switzerland | $55.6 | $54.3 | 2.5% | 1.1% |
| Portugal | $52.0 | $40.3 | 29.3% | 18.3% |
| United Kingdom | $24.4 | $18.5 | 32.2% | 23.7% |
| Russia | $23.9 | $20.9 | 14.3% | 6.1% |
| Germany | $16.6 | $14.3 | 16.6% | 6.7% |
| Italy | $16.6 | $14.2 | 17.0% | 7.1% |
| Ireland | $8.6 | $7.7 | 10.8% | 1.5% |
| Norway | $8.4 | $8.0 | 4.3% | 1.5% |
| Other EMEA | $13.0 | $10.3 | 26.3% | 15.5% |
| Asia Pacific | ||||
| Total APAC | $4.7 | $4.0 | 16.3% | 13.0% |
Full-year results
| (US$ millions) | 2017 | 2016 | % change | % constant currency |
| Revenue | $5,374.4 | $5,276.8 | 1.9% | 1.3% |
| Gross profit | $954.1 | $906.3 | 5.3% | 4.7% |
| Gross margin | 17.8% | 17.2% | ||
| Net earnings | $71.6 | $120.8 | -40.8% |
Guidance
Kelly Services forecasts revenue to rise by between 5% and 6% for the full year 2018.
Share price and market cap
Shares in Kelly Services edged down 0.18% to $28.26 as of 12:36 p.m. Eastern time. The company had a market cap of $1.079 billion.