Sodexo Shares Plunge 17% After Revenue Guidance Cut

Sodexo shares experienced a significant decline after the company revised its full-year revenue guidance downwards, now expecting organic growth of 3% to 4%, compared to the previous forecast of 5.5% to 6.5%. This adjustment was primarily attributed to slower growth in North America, particularly within the university and healthcare sectors, where delays in contract start dates impacted performance. The stock dropped as much as 16%, marking the largest intraday fall since March 2018, and contributing to a 21% decline in shares for the year. Despite a reported first-half revenue of €12.47 billion and a 6.4% increase in underlying operating profit, the company acknowledged the challenges faced in boosting performance in key areas. CEO Sophie Bellon emphasized the need for improved execution to capitalize on existing opportunities. The news also negatively affected rival catering companies, reflecting broader implications for the industry.