Sodexo headquarters in Issy-les-Moulineaux near Paris.
(Reuters) – Sodexo reported a slightly lower-than-expected increase in third-quarter revenue on Tuesday, citing the impact of an accounting change on a “significant” Australian energy contract.
The French food services group also cited a deceleration in price increases, as well as calendar effects and a higher comparison base over the period to explain the sequential slowdown in growth compared to the second quarter.
Sodexo, which spun off its employee benefits business Pluxee in early February, is continuing to raise prices to cushion the effects of inflation, but at a reduced pace.
The group said in a press release that around half of the internal growth was fuelled by price increases, which fell below 4% in the quarter, compared with 5% last year.
Sodexo posted revenue of 6.07 billion euros for the three months from March to May, an organic increase of 6.8% over a year but below analysts’ expectations, who were counting on a result of 6.11 billion euros in a consensus compiled by Sodexo.
This slowdown in sales is “entirely in line” with the group’s expectations, however, declared Sébastien de Tramasure, financial director, during a press conference.
On the Paris Stock Exchange, at around 08:45 GMT, Sodexo shares fell by 5.1% to 81.3 euros, compared to a loss of 0.61% for the SBF 120 index.
RBC analysts note in a note that while they expect this “rather unremarkable” third quarter to have a negative impact on the stock, Sodexo remains an attractive value in the longer term.
RBC, which gives a “neutral” recommendation on the stock, also notes that, despite the result below consensus, Sodexo showed continued positive progress during the third quarter.
(Written by Pauline Foret with Diana Mandia and Dimitri Rhodes, edited by Augustin Turpin)