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View All NewsManpowerGroup points to challenging environment in Europe and US; Q3 revenue down 5.4%
ManpowerGroup Inc. (NYSE: MAN) reported a challenging operating environment in Europe and the US as it announced earnings yesterday. The global staffing firm reported revenue fell 5.4% year over year on a constant currency basis and gross margin narrowed.
Revenue in Southern Europe fell by 3.4% in constant currency while revenue in Northern Europe decreased by 9.5%.
Meanwhile, revenue in Asia Pacific Middle East increased by 3.4% in constant currency.
ManpowerGroup also reported solid demand in Latin America.
“Last quarter we shared that broader economic pressures were building particularly in North America and Europe,” ManpowerGroup Chairman and CEO Jonas Prising said in a conference call with analysts. “Over the last few months, we have seen these pressures increase, with declining outputs in global manufacturing; slowing activity in services; and subdued hiring across some industries as companies pause new hiring and spending following a period of bullish hiring and investment post pandemic.”
Total third-quarter revenue came in at the midpoint of the company’s constant currency range, while gross profit margin came in above guidance.
However, the third quarter includes restructuring costs of $38.1 million, of which $6.0 million were in the Americas, $3.8 million in Southern Europe, $27.5 million in Northern Europe and $800,000 in Asia Pacific and the Middle East.
The company’s Manpower division saw revenue fall 3% year over year on a constant currency, organic basis.
Experis, the company’s IT staffing and services division, reported revenue fell 10% on a constant currency, organic basis.
Talent Solutions revenue fell 14% on a constant currency, organic basis.
“The Experis decline represented lower activity from both enterprise and convenience customer segments,” Executive VP and CFO Jack McGinnis said in a conference call with analysts. “Demand from enterprise technology clients continued to be weak.”
McGinnis continued, “Within Talent Solutions, we saw a significant year-over-year revenue decline in RPO as well as an expected sequential softening of activity from the second quarter. Our MSP business saw revenue declines in the quarter as we reduced certain lower margin activity, while Right Management experienced significant year-over-year revenue growth on higher outplacement volumes in the quarter, with revenue levels fairly steady from the second quarter.”
ManpowerGroup also addressed the war in Israel in the earnings call with Prising expressing sadness at the devastating terrorist attacks and emerging conflict.
| (USD millions) | Q3 2023 | Q3 2022 | Change | % constant currency |
| Revenue from services | 4,675.6 | 4,800.9 | -2.6% | -5.4% |
| Gross profit | 821.9 | 878.5 | -6.4% | -9.0% |
| Gross margin | 17.6% | 18.3% | - | - |
| Net earnings | 30.3 | 111.3 | -72.8% | -73.3% |
Revenue by geography
| United States | 752.6 | 886.6 | -15.1% | -15.1% |
| Other Americas | 358.7 | 353.2 | 1.6% | 13.3% |
| Total Americas | 1,111.3 | 1,239.8 | -10.4% | -7.0% |
| France | 1,209.9 | 1,159.5 | 4.4% | -3.4% |
| Italy | 413.7 | 395.1 | 4.7% | -3.1% |
| Other Southern Europe | 485.1 | 485.2 | 0.0% | -3.7% |
| Total Southern Europe | 2,108.7 | 2,039.8 | 3.4% | -3.4% |
| Northern Europe | 914.2 | 954.1 | -4.2% | -9.5% |
| Asia Pacific Middle East | 564.8 | 586.9 | -3.8% | -1.6% |
| Intercompany eliminations | -23.4 | -19.7 | - | - |
| Total | 4,675.6 | 4,800.9 | -2.6% | -5.4% |
For the fourth quarter, ManpowerGroup forecasts:
- Total revenue to be down between 3% and 7% (down between 4% and 8% in constant currency)
- Americas revenue to be down between 7% and 11% (down between 3% and 7% in constant currency)
- Southern Europe revenue to be down between 1% and 5% (down between 4% and 8% in constant currency)
- Northern Europe revenue to be down between 4% and 8% (down between 6% and 10%)
- Asia Pacific Middle East revenue to be down between 5% and 9% (down between 2% and 6% in constant currency)
- Gross profit margin, between 17.3% and 17.5%
ManpowerGroup set a new 52-week low during Thursday's trading session when it reached $67.35. Over this period, the share price is down -8.60%. Shares closed at $69.50, down 2.40% on the day. The company has a market cap of $3.45 billion.