On Friday, ManpowerGroup (NYSE: MAN) announced that revenue rose 4.5% in constant currency in the second quarter, slightly below the group’s guidance range. On a same-day basis, the group’s underlying organic constant currency revenue growth rate was 3%.

Revenue growth was hampered by slower growth in France though other foreign operations performed well, including in Italy where revenue rose 11.8% in constant currency, Asia Pacific Middle East where revenue was up 10.4% in constant currency and “other Americas,” where revenue rose 13.1% in constant currency.

In France, the company’s largest geography, revenue rose 3.1% in constant currency, a slowdown from previous quarters. The group acknowledged a “softer revenue environment” but said that it believes France is a market in which there continued to be very good opportunities for growth, particularly post the summer holiday season. Profitability in France was also hampered by the reduction in the CICE tax credit.

The US market was also weak and  fell 4.6%. though this was an improvement on the first quarter and the group announced that it has experienced steady improvement in the average daily trend in the US since April. In June, the group exited the quarter on an average daily revenue decline of only 2%. Revenue at Right Management, which provides outplacement, was down 10.5% in constant currency. In addition, second-quarter gross margin for the company narrowed to 16.3% with temporary staffing, Right Management and currency weighing on it.

Among its other Americas operations are Mexico, where revenue rose 9% in constant currency, and Argentina, where revenue rose 19% in constant currency despite falling 19% on a reported basis.

Operating profit for the second quarter was $208 million, up 2% in constant currency. The group incurred restructuring charges during the quarter as well as during the same quarter last year. Excluding these restructuring charges from both years, operating profit was $224 million for the quarter, an increase of 4% in constant currency. Half of the restructuring charges in Q2 2018 related to the UK market.

ManpowerGroup Chairman & CEO Jonas Prising commented, "Our solid second quarter results contributed to a good first half of 2018. Demand for our innovative workforce solutions remains strong and with our market leading global footprint this environment should provide us with opportunities for profitable growth."

“The lower revenue growth rate is primarily attributed to some of our Manpower business in Europe and most notably in France,” Prising said. “Partially offsetting the softer revenue growth trend in some countries were better than expected revenue trends in the UK throughout Asia Pacific and various businesses within the Americas.”

Revenue by geography

In Northern Europe, ManpowerGroup noted UK revenue rose 3% in constant currency, but Dutch revenue fell 1% in constant currency. Revenue was also flat in Germany on a constant currency basis.

By business line, the company reported second-quarter gross profit at its ManpowerGroup Solutions business was up 9% in constant currency. This business includes RPO and MSP operations.

In a conference call with financial analysts on Friday, Jonas Prising highlighted the group’s digital capabilities to improve candidate attraction, client satisfaction and employee productivity including augmented reality, virtual-reality, and digital predictive performance tools.

Looking ahead, ManpowerGroup expects third-quarter revenue to rise 4% to 6% in constant currency. Guidance by geography (in constant currency) was as follows:

• Americas: up 4% to 6%
• Southern Europe: up 3% to 5%
• Northern Europe: up 2% to 4%
• Asia Pacific Middle East: up 10% to 12%
• Right Management: down 4% to 6%

Though revenue growth was not as strong as financial analysts expected, on Friday, ManpowerGroup shares closed at $86.55, up 0.52% on the day and 5.74% above its 52-week low of $81.85, set on 20 July 2018. Based on its current share price the company has a market value of $5.67 billion.