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Sodexo Reports Mixed Earnings: EPS Up, Profit Down

Sodexo shows mixed results as net profit drops while EPS rises. The company's outlook for organic revenue growth is lowered, highlighting potential concerns for investors.

Date: 
AI Rating:   5

Net Income and Earnings Per Share (EPS): Sodexo reported a decrease in net profit from continuing operations, down to 434 million euros from 496 million euros in the previous year. However, the underlying net profit from continuing operations increased to 450 million euros, up from 427 million euros. This indicates some positive movement in the underlying profits despite the total net income decline. The basic underlying EPS from continuing operations improved to 3.08 euros, up from 2.91 euros.

Revenue Growth: The company's first half revenues rose to 12.47 billion euros, compared to 12.10 billion euros from the last year, reflecting an increase in organic revenue growth of 3.5%. This shows that while profit margins have fluctuated, the company maintains a trajectory of growth in its revenue generation.

Future Outlook: Looking ahead, Sodexo has revised its fiscal 2025 organic revenue growth expectations from a range of 5.5%-6.5% down to 3%-4%. Additionally, the underlying operating margin growth guidance was adjusted to 10 to 20 basis points, down from the previous 30 to 40 basis points. This downward revision indicates reduced expectations and could signal to investors a less optimistic financial forecast.

Stocks:  SDXAY