MW A catering giant just warned on profits. The U.S. education and healthcare market are to blame.

By Steve Goldstein

Shares of Sodexo on Thursday slumped as the catering giant said softer education volumes and a delay in signups of healthcare contracts in the U.S. will hit results.

Sodexo (FR:SW) shares tumbled 15% to a two-year low.

Sodexo, headquartered outside of Paris, said it's now expecting fiscal year organic revenue growth between 3% and 4%, which was lower than its previous 5.5% to 6.5% growth forecast, as underlying operating margins will improve 10 to 20 basis points instead of 30 to 40 basis points.

Fiscal first-half organic revenue growth was 3.5% as its underlying operating margins rose 10 basis points to 5.2%. Sodexo said other regions helped to compensate for the U.S. weakness, notably Australia, India and Brazil.

Sodexo's U.S. higher-education clients are focused in the Northeast and Midwest, where they see lower enrollment and lower take-up of meal plans, said CFO Sebastien de Tramasure.

-Steve Goldstein

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March 20, 2025 05:14 ET (09:14 GMT)

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