March 29, 2018 / 5:26 AM / 21 days ago

Services group Sodexo cuts guidance after weak Q2 performance

PARIS, March 29 (Reuters) - French food services and facilities management group Sodexo said on Thursday it was cutting its full year sales and profit margin outlook, after its second quarter performance came below expectations.

Sodexo, which is the world’s second-biggest catering services company after Britain’s Compass Group, had identified areas of underperformance and would implement a series of measures to improve matters, the company added.

Sodexo said it now expected to deliver organic revenue growth of between 1-1.5 percent for the 2018 fiscal year, and an underlying profit margin of around 5.7 percent.

In January, Sodexo had forecast revenue growth of between 2-4 percent and a flat operating margin at 6.5 percent of sales for the full year ending August 31, 2018, excluding the impact of acquisitions and currency exchange movements.

For the first-half ended Feb. 28, organic revenue growth was 1.7 percent and underlying operating margin was 6.1 percent, with both coming below expectations, the company said.

Sodexo is holding a conference call at 0630 GMT on Thursday. (Reporting by Dominique Vidalon; Editing by Sudip Kar-Gupta)

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