Daily News
View All NewsWorld – Kelly Services revenue up 4% in second quarter; company cites growth in Europe
Second-quarter revenue at Kelly Services (NASD: KELYA) rose 4.0% yesterday with strong growth in Europe. The increase in constant currency was 3.0%. Revenue rose in the company’s Americas staffing and international staffing segments, but fell in its global talent solutions segment, which includes the company’s MSP and RPO business lines.
Americas revenue reflects the September 2017 acquisition of education staffing firm Teachers on Call.
| (USD millions) | Q2 2018 | Q2 2017 | % change | % constant currency |
| Revenue | 1,386.9 | 1,333.6 | 4.0% | 3.0% |
| Gross profit | 240.5 | 228.8 | 5.1% | N/A |
| Gross margin | 17.3% | 17.2% | N/A | N/A |
| Net earnings | (15.4) | 18.7 | N/A | N/A |
The company noted a $52.5 million noncash loss on its investment in Japan-based staffing provider Persol Holdings.
Speaking to financial analysts yesterday, President and CEO, George Corona warned that “With unemployment hovering near the lowest level in five decades, qualified candidates are becoming more difficult to attract and retain. As the economy approaches full employment, candidates now have more job opportunities from which to choose and they are becoming more selective in their job choices.”
Revenue by segment was as follows.
| (USD millions) | Q2 2018 | Q2 2017 | % change | % constant currency |
| Americas staffing | 604.0 | 575.6 | 4.9% | 5.2% |
| Global talent solutions | 500.7 | 505.5 | -0.9% | -1.2% |
| International staffing | 286.6 | 256.8 | 11.6% | 6.6% |
Second-quarter gross margin was 18.0% in the Americas staffing segment, flat compared to last year. Global talent solutions gross margin rose to 18.5% in the second quarter from 17.5% in the year-ago quarter. International staffing gross margin fell to 13.9% from 14.3% in the same quarter last year.
Revenue by geography was as follows.
| (USD millions) | Q2 2018 | Q2 2017 | % change | % constant currency |
| Americas | ||||
| United States | 981.2 | 970.1 | 1.1% | 1.1% |
| Canada | 37.0 | 34.6 | 6.8% | 2.6% |
| Mexico | 30.0 | 28.3 | 6.2% | 11.4% |
| Puerto Rico | 26.2 | 17.6 | 49.0% | 49.0% |
| Brazil | 9.0 | 12.7 | -29.1% | -22.6% |
| Europe, Middle East and Africa | ||||
| France | 72.0 | 68.3 | 5.2% | -2.6% |
| Switzerland | 52.8 | 53.9 | -2.0% | -1.7% |
| Portugal | 51.2 | 41.7 | 23.1% | 13.6% |
| United Kingdom | 28.5 | 20.8 | 37.0% | 28.9% |
| Russia | 25.6 | 24.0 | 6.5% | 15.4% |
| Italy | 19.3 | 15.7 | 23.0% | 14.4% |
| Germany | 14.8 | 14.6 | 0.5% | -7.2% |
| Ireland | 11.7 | 7.4 | 58.4% | 46.4% |
| Norway | 9.2 | 8.4 | 10.4% | 4.3% |
| Other EMEA | 12.8 | 11.0 | 16.0% | 8.1% |
| Asia Pacific | ||||
| Total APAC | 5.6 | 4.5 | 24.2% | 23.0% |
Looking ahead, the company expects third-quarter revenue to be up 2% to 3% year over year. The company cautioned that the outlook for the full year has been encumbered with a continued slower topline growth rate in Q2 and as a result, their outlook has declined slightly since Q1.
In trading yesterday, Kelly Services shares closed at $24.63, up 1.03% on the day and 17.23% above the 52 week low of $21.01 set on 18 August 2017. Based on its current share price the company has a market value of $950.71 million.