Sodexo Slashes FY2026 Guidance Following Sharp H1 Profit Decline

Sodexo S.A. has reported a steep decline in first-half fiscal 2026 profits, prompting the services provider to trim its full-year outlook. The company's group net profit plummeted 56.7% to 188 million euros, down from 434 million euros in the prior year, while basic earnings per share fell to 1.29 euros from 2.98 euros. The results highlight a period of operational volatility for the facilities management firm as it grapples with execution hurdles and a softening external environment. While organic revenue showed slight growth, the bottom line was heavily impacted by margin compression and contract losses in key markets. Revenue for the period fell 3.7% to 12.02 billion euros. Underlying operating profit dropped 32.1% to 442 million euros, with the underlying operating profit margin contracting by 150 basis points to 3.7%. Geographically, performance was mixed; North America saw a 1.8% decline in organic revenue due to losses in the Education and Business & Administration segments, while the 'Rest of World' segment surged by 9.2%, driven by robust dynamics in India, Australia, and Brazil. Looking ahead, Sodexo has lowered its organic revenue growth target to between 0.5% and 1%, down from the previous guidance of 1.5% to 2.5%. The company also revised its underlying operating profit margin expectations to a range of 3.2% to 3.4%. Management plans to present a detailed execution agenda and medium-term ambitions during an investor update in Paris on July 16.