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View All NewsManpowerGroup cites impact of Covid-19: Revenue down 6%, withholds guidance
Covid-19 impacted ManpowerGroup Inc.’s (NYSE: MAN) first-quarter earnings. Revenue was down 5.9% in constant currency while the company said it is focused on managing costs. The Milwaukee-headquartered staffing giant is withholding guidance given the uncertainty when governments will ease stay-at-home restrictions.
The company’s US revenue fell 2% in the first quarter. However, Canadian revenue rose 9% in constant currency while Mexican revenue was flat, also in constant currency.
At the same time, revenue at franchisees fell 66.1% to $82.3 million in the first quarter from $243.0 million in the same period last year. ManpowerGroup does not include revenue from franchise offices in its own revenue — it includes only fees received from them, which were $3.3 million in the first quarter and $5.6 million in the year-ago quarter.
“The Covid-19 crisis has significantly disrupted the global economy, our clients and the demand for our services,” Chairman and CEO Jonas Prising said in a statement. “The speed and magnitude of change in market conditions in the last few weeks of March was unlike anything we have seen in our over 70-year history.”
Still, the company is putting in place business continuity plans and expects to emerge from the crisis better-positioned to capture growth and market share, Prising said.
| (US$ millions) | Q1 2020 | Q1 2019 | % change | % constant currency |
| Revenue | $4,619.1 | $5,044.9 | -8.4% | -5.9% |
| Gross profit | $724.0 | $804.8 | -10.0% | -7.7% |
| Gross margin | 15.7% | 16.0% | ||
| Net earnings | $1.7 | $53.5 | -96.8% | -96.0% |
Bottom line: First-quarter net earnings fell 96.8%. The company said the quarter included restructuring costs that affected earnings by 68 cents per share and a noncash pension settlement charge that reduced earnings by 11 cents per share. On a constant currency basis, net earnings per diluted share fell by 95%, but they fell only 39% when excluding the restructuring costs and settlement charge.
Revenue by geography
| (US$ millions) | Q1 2020 | Q1 2019 | % change | % constant currency |
| Americas | ||||
| United States | $610.9 | $623.2 | -2.0% | -2.0% |
| Other Americas | $400.1 | $407.0 | -1.7% | 6.1% |
| Total Americas | $1,011.0 | $1,030.2 | -1.9% | 1.2% |
| Southern Europe | ||||
| France | $1,093.8 | $1,306.1 | -16.2% | -13.7% |
| Italy | $327.7 | $356.4 | -8.0% | -5.3% |
| Other Southern Europe | $523.2 | $446.3 | 17.2% | 18.3% |
| Total Southern Europe | $1,944.7 | $2,108.8 | -7.8% | -5.5% |
| Northern Europe | $1,068.5 | $1,200.5 | -11.0% | -7.9% |
| Asia Pacific Middle East | $594.9 | $705.4 | -15.7% | -14.0% |
Looking at gross profit by business line, “Talent Solutions” gross profit was up 1%; Talent Solutions includes RPO, Tapfin MSP and Right Management outplacement services. Experis gross profit was down 12% while Manpower gross profit fell 12%.
Share price and market cap
Shares in ManpowerGroup were up 4.2% to $64.52 as of 11:33 a.m. Eastern time; the company had a market cap of $3.63 billion, according to FT.com.