PARIS (dpa-AFX) - Sodexo S.A. (SDXAY.PK), a food and facilities management services provider, Friday reported sharply lower profit in its first half of fiscal 2026, amid weak revenues. Further, the firm trimmed outlook for fiscal 2026.
The company's group net profit declined 56.7 percent to 188 million euros from last year's 434 million euros. Basic earnings per share fell to 1.29 euros from 2.98 euros a year ago.
Group underlying net profit was 285 million euros or 1.96 euros per basic share, compared to 450 million euros or 3.08 euros per basic share last year.
Operating profit dropped 46.2 percent year-over-year to 312 million euros, and underlying operating profit fell 32.1 percent to 442 million euros.
The company's underlying operating profit margin declined by 150 basis points from last year to 3.7 percent, impacted by execution challenges and initial management actions.
Revenues decreased 3.7 percent to 12.02 billion euros from 12.48 billion euros last year, while it grew 1.6 percent on a constant currency rate.
Organic revenue growth was 1.7 percent, with pricing contributing around 2.4 percent and like-for-like volume growth of around 0.2 percent.
Sodexo's performance varied across its geographic segments. North America saw a 1.8 percent decline in organic revenue, mainly reflecting contract losses in the Education and Business & Administrations segments.
Europe, on the other hand, reported 2.8 percent organic growth, supported by the Healthcare & Seniors and Sodexo Live! businesses, while the Education segment remained weaker. The Rest of the World segment delivered strong 9.2 percent organic growth, driven by new contract ramp-ups and robust underlying dynamics, particularly in India, Australia, and Brazil.
Looking ahead, Sodexo has lowered its fiscal 2026 outlook. The company now expects organic revenue growth between 0.5 percent and 1 percent, down from the previous guidance of 1.5 percent to 2.5 percent. The adjustment reflects weaker first-half commercial momentum, as well as lower volumes expected in an uncertain external environment.
The company also expects its underlying operating profit margin to be between 3.2 percent and 3.4 percent, compared to previous view of slightly lower than fiscal 2025.
The change in outlook reflects softer top-line growth, execution challenges in certain areas, and the impact of the review of contracts and assets
Sodexo plans to present its execution agenda and medium-term ambitions at its Investor update in Paris on July 16.
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