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View All NewsManpowerGroup Q1 revenue falls 2% in constant currency, gross margin holds steady
First-quarter revenue fell 8.6% at ManpowerGroup Inc. (NYSE: MAN). Revenue was down 2.2% on a constant currency basis. Chairman and CEO Jonas Prising cited a slow global growth environment. However, the Milwaukee-based firm also noted a stabilization of the economic slowdown in a number of key European markets. On a reported basis, not in constant currency, revenue fell 8.6% in the first quarter.
Gross margin held steady at 16.0%.
ManpowerGroup also reported restructuring costs reduced earnings per share by 51%.
| (US$ millions) | Q1 2019 | Q1 2018 | % change | % constant currency |
| Revenue | $5,044.9 | $5,522.4 | -8.6% | -2.2% |
| Gross profit | $804.8 | $885.4 | -9.1% | -3.0% |
| Gross margin | 16.0% | 16.0% | ||
| Net earnings | $53.5 | $97.0 | -44.8% | -40.4% |
US revenue fell 2.1% in the first quarter. Revenue also fell 9.1% in Southern Europe and 16.1% in Northern Europe, however, the declines on a constant currency basis were 1.6% and 8.8%, respectively.
Revenue rose in Asia Pacific and the Middle East.
Revenue by geography
| (US$ millions) | Q1 2019 | Q1 2018 | % change | % constant currency |
| Americas | ||||
| United States | $603.6 | $616.3 | -2.1% | -2.1% |
| Other Americas | $403.7 | $406.3 | -0.6% | 10.7% |
| Total Americas | $1,007.3 | $1,022.6 | -1.5% | 3.0% |
| Southern Europe | ||||
| France | $1,301.4 | $1,424.0 | -8.6% | -1.1% |
| Italy | $355.9 | $413.6 | -14.0% | -6.9% |
| Other Southern Europe | $444.9 | $474.4 | -6.2% | 1.5% |
| Total Southern Europe | $2,102.2 | $2,312.0 | -9.1% | -1.6% |
| Northern Europe | $1,189.7 | $1,417.6 | -16.1% | -8.8% |
| Asia Pacific Middle East | $699.9 | $720.2 | -2.8% | 1.9% |
| Right Management | $45.8 | $50.0 | -8.4% | -4.5% |
Gross profit fell 7% in the company’s ManpowerGroup Solutions business line but rose 2% in constant currency. The business line includes MSP and RPO.
Experis gross profit fell 5% but was flat in constant currency.
Meanwhile, first-quarter gross profit in its Manpower division fell 11%, down 4% in constant currency.
Separately ManpowerGroup also noted that it purchased the remaining interest in the Switzerland Manpower franchise business with annual revenues of approximately $500 million.
Quote
“Our global team executive well and delivered solid first-quarter results against a backdrop of a slow global growth environment,” Chairman and CEO Jonas Prising said in a statement.
Guidance
Second-quarter revenue is expected to fall 3% to 5% year over year, ManpowerGroup reported. On a constant currency basis, revenue is expected to range from a 1% decrease to a 1% increase.
Gross profit margin for the first quarter is expected to be in the range of 16.1% to 16.3%
The first-quarter revenue forecast for geographies:
- Americas, flat to down 2% (up 2% to 4% in constant currency)
- Southern Europe, up 1% to down 1% (up 4% to 6% in constant currency)
- Northern Europe, down 12% to 14% (down 8% to 10% in constant currency)
- Asia Pacific Middle East, down 5% to 7% (down 2% to 4% in constant currency)
- Right Management, down 6% to 8% (down 3% to 5% in constant currency)
Share price and market cap
Shares in ManpowerGroup rose 6.91% to $92.96 as of 11:37 a.m. Eastern time; the company had a market cap of $5.22 billion, according to FT.com.