TSX gains after CPI shows US inflation rose 3%
Investing.com -- Sodexo shares slumped 9% Thursday after the French food caterer forecast slower revenue growth for 2026, pointing to weakness in its U.S. operations after a solid performance this year.
The group now expects organic revenue growth of between 1.5% and 2.5% next year, down from its previous forecast of 3% to 4%.
“One of the main drivers of organic growth for next year will remain price increases,” Finance Chief Sébastien de Tramasure said on a call with reporters.
The company also expects its underlying operating profit margin to be “slightly lower” than in 2025, reflecting “mix and phasing of our growth drivers and targeted investments to enhance our Group’s foundations for profitable growth.”
"Guidance is weaker than expected in what the company describes as a transition year," Morgan Stanley analyst Jamie Rollo commented.
For the full year 2025, Sodexo reported revenue of €24.07 billion ($28.07 billion), with organic growth of 3.3%, slightly above the 3.1% analysts had expected.
Adjusted earnings per share (EPS) came in at €5.37, ahead of the €5.29 consensus.
The underlying EBITA margin expanded by 5 basis points on a reported basis, and by 10 basis points at constant exchange rates, while reported EBIT fell 6% to €985 million.
Net debt rose modestly to €2.7 billion from €2.6 billion a year earlier.
The company’s North American business saw a notable slowdown, with organic growth easing to 2.8% from 8.7% the previous year, mainly due to contract losses in its education division.
Sodexo’s new CEO Thierry Delaporte is set to start working on November 10, and RBC Capital Markets analysts expect him to "instigate some form of strategic review/reorganisation, so most investors are likely to see today’s results as something of a holding statement."
"However, we think this will be offset by the outlook," they added, and believe the stock "is likely to keep drifting relative to peers in the meantime."