Sodexo Shares Plunge 15% as Company Slashes FY26 Outlook Amid Execution Failures

Sodexo S.A. shares dropped nearly 15% in Paris trading on Friday after the food and facilities management giant reported a steep decline in first-half earnings and lowered its fiscal 2026 guidance. The company's net profit plummeted 56.7% to 188 million euros, down from 434 million euros in the prior year. CEO Thierry Delaporte admitted the firm had "undeniably underperformed" its competitors, attributing the slump to systemic issues in decision-making, commercial intensity, and a lack of investment. Delaporte noted that a thorough review of contracts and assets has led to short-term financial implications that are now reflected in the revised outlook. Financial metrics showed a significant contraction, with revenues decreasing 3.7% to 12.02 billion euros. The underlying operating profit margin fell by 150 basis points to 3.7%, compared to 4.7% in the previous year. Looking ahead, Sodexo has trimmed its FY26 organic revenue growth forecast to between 0.5% and 1%, down from the previous target of 1.5% to 2.5%. Performance varied by region, with North American operations struggling due to contract losses in the education and business sectors. Conversely, the 'Rest of the World' segment delivered strong 9.2% organic growth, driven by robust dynamics in India, Australia, and Brazil. The company is scheduled to present its medium-term ambitions and execution agenda at an investor update in Paris on July 16.