FRENCH food caterer Sodexo cut its annual sales and profitability targets on Friday, citing execution challenges and its management's review of contracts and assets.
The group sees organic revenue growth of between 0.5 percent and 1 percent this year, down from the previously expected 1.5 percent to 2.5 percent. It expects its underlying operating margin to be clearly lower at between 3.2 percent and 3.4 percent, having earlier guided for a slight decline from last year's 4.7 percent.
"We have undeniably underperformed the market and our main competitors," CEO Thierry Delaporte, who replaced Sophie Bellon in November, said in a press release.
On a reported basis, Sodexo's revenue fell 3.7 percent to 12.02 billion euros ($14.05 billion) in the first half of its 2026 financial year, weighed down by the effects of converting US dollars into euros. Analysts polled by Sodexo were expecting slightly higher revenue of 12.08 billion euros.
Organic growth, which excludes currency exchange effects and contributions from bought and sold assets, met analyst expectations at 1.7 percent and was supported by higher pricing, the group said.
Sodexo said in October that pricing would be the main driver of organic growth in 2026, after it saw a 10.5 percent drop in revenue from new contract signings in the previous fiscal year.
