TrueBlue Inc. (NYSE: TBI), a provider of industrial staffing and recruitment process outsourcing, reported a continued challenging environment in its fiscal third quarter ended Sept. 24. Revenue fell 17.8% to $473.2 million at the Tacoma, Washington-based firm, short of the low range of guidance of $484 million.

The company also recorded $1.5 million for workforce reduction costs, $500,000 in adjustments to Covid-19 government subsidies and $200,000 incurred while transitioning to a new third-party administrator for workers’ compensation.

From a net income and loss perspective, results roughly broke even in the quarter, down $10,000.

“While the operating environment remains soft, we are starting to see signs of potential stabilization in the demand trends for certain parts of our business,” said Taryn Owen, who took over the role of president and CEO in September.

“Our teams are staying highly engaged to help our clients navigate this uncertainty and to ensure we are poised to support them when their staffing needs expand,” Owens said in a conference call with investors. “We are being proactive with our sales approach by leveraging our playbooks and centralized teams to capitalize on every opportunity, and we have a particular focus on high-growth verticals and under-penetrated geographies nationwide. Additionally, we are pursuing shorter-term projects and offering flexible solutions to clients in order to meet immediate needs while positioning us for future expansion opportunities.”

Revenue fell across business lines, led by a 31.7% decline in PeopleScout, which includes the company’s RPO business. TrueBlue reported reduced client hiring following elevated volumes last year due to continued cost pressures.

Third-quarter revenue at PeopleReady, the company’s largest division, fell 15.4% year over year. TrueBlue reported lower client volumes in the division, especially in retail, transportation and service. However, it noted gains of potential stabilization with weekly sequential trends following historical patterns as it exited the quarter. PeopleReady provides industrial staffing in the US, Canada and Puerto Rico and includes the JobStack mobile app.

Finally, revenue in TrueBlue’s PeopleManagement division fell 16.2% year over year because of lower client volume in retail and transportation, including commercial drivers, according to the company. It noted signs of potential stabilization in weekly sequential trends for hourly on-site demand and $26 million of annualized new wins. PeopleManagement encompasses TrueBlue’s on-site staffing business and its Centerline Drivers truck driver staffing business.

Guidance

TrueBlue forecast fourth-quarter revenue of between $450 million and $475 million, representing a year-over-year decrease of between 19% and 15%, assuming the sequential revenue build from third quarter to fourth quarter follows historical patterns.

Gross margin is forecast to be down 30 to up 10 basis points year over year.

Share Price

Shares in TrueBlue were down 19.95% to $10.94 as of 10:59 a.m. Eastern time; they set a new 52-week low today when they reached $10.30, according to FT.com. 

New Chief People Officer 

Separately, TrueBlue announced Oct. 23 that Greg Netolicky joined the company as chief people officer, reporting directly to Owen.

Netolicky has more than 20 years of experience across all aspects of human resources and most recently served as the chief human resources officer for Rite-Hite Holding Co., a global manufacturing company. Netolicky also served as VP of human resources, components and integrated supply chain at Johnson Controls.

“Greg will be a great addition to our leadership team. He is an exceptional culture fit and has a proven track record of aligning people strategy to drive organizational performance,” Owen said in a press release. “I am confident that Greg will help ensure TrueBlue remains a top destination for talent where our employees can advance and thrive.”