Daily News
View All NewsWorld – Kelly Services Q3 revenue down 5% in constant currency; ‘challenging’ quarter, CEO says
Third-quarter revenue at Kelly Services Inc. (NASDAQ: KELYA) fell 4.8% year over year in constant currency. It follows a 0.2% year-over-year revenue decline in the second quarter.
Results in the third quarter include the acquisitions of NextGen and Global Technology Associates in January. Excluding the acquisitions, third-quarter revenue fell 7.5% in constant currency.
“It was a challenging quarter as our newly restructured US branch operations sought to capture high-value growth amidst a sluggish manufacturing sector and a tight labour market,” President and CEO Peter Quigley said.
Asia-Pacific revenue rose 25.9% in constant currency during the third quarter. Revenue fell in many European markets, although revenue in Russia was up 22.4% in constant currency.
US revenue fell 4.2% in the third quarter at the US-based staffing firm.
| (USD millions) | Q3 2019 | Q3 2018 | % change | % constant currency |
| Revenue | 1,267.7 | 1,342.4 | -5.6% | -4.8% |
| Gross profit | 227.7 | 239.1 | -4.8% | -4.1% |
| Gross margin | 18.0% | 17.8% | - | - |
| Net earnings | (10.5) | 33.1 | N/A | - |
Third-quarter gross margin improved, but the company posted a net loss.
Revenue by segment
| (USD millions) | Q3 2019 | Q3 2018 | % change | % constant currency |
| Americas staffing | 516.0 | 561.8 | -8.1% | -8.0% |
| Global talent solutions | 502.5 | 507.6 | -1.0% | -0.8% |
| International staffing | 252.9 | 277.2 | -8.8% | -5.8% |
Global talent solutions revenue includes RPO, business process outsourcing, talent fulfilment and other services.
Revenue by geography
| (USD millions) | Q3 2019 | Q3 2018 | % change | % constant currency |
| Americas | ||||
| United States | 903.2 | 942.5 | -4.2% | -4.2% |
| Canada | 34.6 | 37.0 | -6.5% | -5.5% |
| Mexico | 32.4 | 32.3 | 0.6% | 3.1% |
| Puerto Rico | 18.8 | 28.2 | -33.2% | -33.2% |
| Brazil | 8.4 | 8.1 | 3.1% | 4.3% |
| Europe, Middle East and Africa | ||||
| France | 59.7 | 68.8 | -13.4% | -9.4% |
| Switzerland | 50.6 | 53.8 | -6.0% | -5.8% |
| Portugal | 44.0 | 48.2 | -8.5% | -4.2% |
| Russia | 29.9 | 24.0 | 24.2% | 22.4% |
| United Kingdom | 24.9 | 28.1 | -11.3% | -6.2% |
| Italy | 18.5 | 18.3 | 0.9% | 5.6% |
| Germany | 11.5 | 13.8 | -16.4% | -12.5% |
| Ireland | 7.1 | 11.3 | -36.7% | -33.9% |
| Other EMEA | 16.6 | 21.8 | -24.0% | -19.5% |
| Asia Pacific | ||||
| Total APAC | 7.5 | 6.2 | 19.8% | 25.9% |
Guidance
Kelly Services forecasts fourth-quarter revenue to be down by between 4% and 5%.
In trading yesterday, Kelly Services shares closed at USD22.35, down 9.59% on the day and 16.35% above the 52 week low of USD19.21 set on 26 December 2018. Based on its current share price the company has a market value of USD877.47 million.