ManpowerGroup Inc. (NYSE: MAN) said labour employers in North America and Europe remain cautious as it announced its first-quarter results yesterday. Revenue at the Milwaukee-based global staffing firm fell 5.5% year over year in constant currency (cc) to $4.40 billion.

Earnings per share beat analysts’ expectations as did the company’s Q2 2024 forecast. Normalized EPS amounted to $0.94, 2.2% ahead of consensus estimates driven by significant decreases in operating expenses. SG&A expenses declined by 6.4%.

The company stated that gross profit margin of 17.5% (adjusted) reflects resilient staffing margin trends and stable permanent recruitment trends at lower levels.

“Employers in North America and Europe remain cautious as they wait for signs that the economic environment is on a sustainable path of improvement,” ManpowerGroup Chairman and CEO Jonas Prising said in a press statement. “In some of those markets, demand for staffing and permanent recruitment stabilized at lower levels, while demand across Latin America and Asia Pacific Middle East remained solid. We continue to prioritize the execution of our strategic initiatives and are accelerating sales activities to drive profitable growth when demand trends strengthen.” 

The company reported net earnings fell 46.4% to $39.7 million compared to the prior year. The quarter included losses related to the ‘run-off’ losses at Proservia Germany business and minor Argentina-related currency translation losses. 

Gross margin was 17.3% in the first quarter, down from 18.2% a year ago. 

In a conference call with investors, Prising pointed towards continued stabilization in various key markets, most notably in the US and the UK, and in some other European markets, though at lower levels.  

By business unit, Manpower declined 3% in constant currency, while both Experis and Talent solutions were down 11%. In Talent Solutions, the RPO revenue rate of decline was stable from the Q4 trend, MSP reported flat revenues representing an improvement from the Q4 trend, while Right Management revenue growth remained solid due to increased Outplacement activity.

ManpowerGroup’s Other Americas division was the only region to record positive constant-currency revenue expansion in Q1 2024, up 12.5% with strength in Latin America. The worst performing countries/regions were the Nordics where revenue declined 25% in constant currency, the UK down 14% (in cc) and Switzerland down 13% (in cc).

For the second quarter, ManpowerGroup forecasts: 

• Total revenue to be down between 5% and 9% (down between 2% and 6% in constant currency) 
• Americas revenue to be down between 5% and 9% (up 4% to flat in constant currency) 
• Southern Europe revenue to be down between 4% and 8% (down between 2% and 6% in constant currency) 
• Northern Europe revenue to be down between 8% and 12% (down between 7% and 11%) 
• Asia Pacific Middle East revenue to be down between 6% and 10% (down between 1% and 5% in constant currency) 
• Gross profit margin, between 17.5% and 17.7% 

 ManpowerGroup shares closed yesterday at $74.03, up 5.65% and 9.92% above its 52-week low of $67.35, set on 19 October 2023. The company has a market cap of $3.58 billion.