Key Takeaways:
(Paris) – Sodexo SA shares plunged more than 15% after the French food services group reported weaker-than-expected first-half results and cut its full-year revenue forecast, citing a slowdown in its corporate services division.
"The post-Covid recovery in corporate catering is proving slower than anticipated, impacting our top-line momentum," said Sophie Bellon, Chairwoman and CEO of Sodexo, in a statement. "We are taking immediate action to adapt our cost base and protect our profitability."
The company reported underlying operating profit of €812 million for the six months ended Feb. 29, missing the consensus analyst estimate of €845 million. The operating margin of 5.1% also fell short of the 5.4% expected by the market. Sodexo lowered its fiscal 2026 organic revenue growth guidance to a range of 4% to 5%, down from a previous forecast of 6% to 7%.
The sharp guidance reduction signals that challenges in the corporate services sector, a key market for Sodexo and its competitor Compass Group, may be more persistent than previously thought. The stock's decline to its lowest level since 2022 tests a key technical support level. Investors will be closely watching the company's third-quarter results in July for signs of stabilization.
This article is for informational purposes only and does not constitute investment advice.
