Caterer Compass Group's revenue growth to ease as inflation slows, shares dip

Tue, 25th Nov 2025 11:12

Compass sees strong North America growth, up 9.1% in organic revenue

Shares dip on in-line expectations for 2026

Expects 2026 organic revenue growth around 7%

Nov 25 (Reuters) - Compass Group expects revenue growth to moderate in 2026 due to lower inflation, sending shares 3% lower even as strong demand for workplace dining and new business wins in the United States fuelled a beat on results.

The world's largest caterer, which serves office workers at the likes of Google, Amazon and Microsoft, forecast profit growth of about 10% and organic revenue growth around 7% for the new financial year, broadly in line with expectations.

Its revenue growth expectations are lower than the 8.7% it posted for the year ended September.

"We're seeing inflation slowing down a fraction faster than what we thought last year," finance chief Petros Parras told analysts in a post-earnings call in response to a question about the company's conservative guidance.

Compass, which over the past year benefitted from stronger pricing, will partly pass on lower costs to clients, leading to moderating revenue growth, Parras said.

"With FY26 guidance broadly in line with the street, this (lack of upgrades) might not be enough for the shares," J.P. Morgan analysts said in a note.

Shares in the company, which serves offices, hospitals, universities and sports and leisure events in about 30 countries, were down 3% by 1035 GMT, taking losses for the year to more than 10%.

ALL SOLID STUFF

Compass' organic revenue in its largest market of North America increased 9.1% in the year, with growth across its main sectors.

"All solid stuff with good growth levels across the board, but unlikely to excite the average investor first thing," RBC Capital Markets analyst Karl Green said in a note. Compass is benefitting from new business wins in the U.S., including at J.P. Morgan's new headquarters in New York. U.S. rival Aramark had forecast an encouraging 2026 despite fourth-quarter revenue missing expectations, while France's Sodexo last month flagged slower revenue growth in 2026 due to contract losses and a lack of competitiveness in the U.S.

Compass posted annual underlying operating profit of $3.34 billion on revenue of $46.1 billion, ahead of the $3.31 billion and $45.4 billion, respectively, expected by analysts in a company-compiled poll.