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Kelly Services, Inc. (NASDAQ:KELYA) reported Q2 revenues of $1.217 billion, missing the analyst consensus of $1.24 billion. Revenues fell 3.9% year over year.
Adjusted EPS of $0.36 missed the street view of $0.40.
Year-over-year revenue trends were impacted by the sale of Russian operations in July 2022.
Gross profit fell 8.3% Y/Y to $240.6 million, with gross margins of 19.8%, slumping 90 bps Y/Y due primarily to lower permanent placement fees as customer full-time hiring decelerates.
Kelly reported Q2 earnings from operations of $6.2 million, lower than $8.2 million a year ago.
KELYA exited the quarter with cash and equivalents worth $134.5 million.
"Our Education segment and higher-margin outcome-based solutions in P&I continued to deliver year-over-year growth, while lower demand for temporary and permanent placement services impacted results in our P&I and SET segments," said Peter Quigley, president and chief executive officer.
On August 9, KELYA's board of directors declared a dividend of $0.075 per share, payable on September 6, 2023, to shareholders of record on August 23, 2023.
Outlook: The company expects its comprehensive business transformation program to drive meaningful improvement in EBITDA margin beginning in the second half of 2023.
Assuming the benefit of a full year of its transformation-related savings and no change in current top-line expectations, KELYA would expect to achieve a normalized, adjusted EBITDA margin of 3.3% to 3.5% exiting FY23.
Price Action: KELYA shares are trading lower by 3.34% to $17.67 on the last check Thursday.
Posted In: KELYA
