Sodexo cuts 2026 targets as new CEO gears to tackle long-standing issues

Fri, 10th Apr 2026 10:50

* Sodexo lowers sales and margin forecasts due to execution challenges and contract reviews

* CEO Delaporte to tackle underinvestment, inconsistent performance and slow decision-making

* Analyst suggests competition from ‌Aramark a driver for US market struggles

April 10 (Reuters) - French food caterer Sodexo slashed its annual sales and ⁠profitability targets on Friday, citing execution challenges and its management's ⁠review of contracts and assets, which sent its shares falling 13%.

The group sees organic revenue growth of between 0.5% and 1% this year, down from the previously expected 1.5% to 2.5%. It expects its underlying operating margin to be clearly ‌lower at between 3.2% and 3.4%, having earlier guided for a slight decline from last year's 4.7%.

"Shares should react negatively given a bigger-than-expected earnings reset and deteriorating commercial performance in H1," Jefferies analysts said in their first take on the half-year report.

Sodexo’s shares have lost around 40% of their value in the past two years, clearly underperforming key food services rivals Compass and Aramark, ‌an issue new CEO Thierry Delaporte highlighted in his comments to the press.

"We have consistently underperformed compared to the market and our competitors," ‌Delaporte told journalists. "The causes are deep-rooted and long-standing." Delaporte, who replaced Sophie Bellon in November, said Sodexo had underinvested in key skills and lacked consistency in its performance and forecasts.

He also pointed to issues in commercial intensity, priority management and an overly cumbersome decision-making structure, all of which he aims to tackle.

AlphaValue analyst ‌Yi Zhong said she expected Sodexo to increase capital spending to match its peers, while potentially lowering dividend payouts.

WEAKNESS IN NORTH AMERICA Sodexo's revenue fell 3.7% to 12.02 billion euros ($14.05 billion) in the ⁠first half ⁠of its financial year, weighed down by the effects of converting ‌U.S. dollars into euros, and as the North American business continued to struggle. That was some 60 million euros below analysts' consensus.

Rising competition from Aramark may explain some of the troubles in the U.S. ‌markets, Morningstar analyst Ben Slupecki said.

"Sodexo has failed to adjust, has been caught flat-footed, and has seen net new deceleration into losses in the first half of the year," Slupecki told Reuters.