Sodexo SA on July 7 projected a 28% revenue decline for the second half of fiscal 2020 after the coronavirus pandemic wiped out nearly one-third of its fiscal third-quarter revenue.
The France-based catering services provider now estimates a second-half sales slump of about €3 billion compared to a €2.4 billion to €2.8 billion revenue shortfall forecast in April. Full-year revenue is estimated to decrease 13.7%.
However, Sodexo expects its underlying operating profit flow-through for the second half to be between 20% and 23% of the revenue shortfall, versus its previous outlook of 25%.
The company said the pandemic effects are "still strong" in North America, Latin America and India. As a result, it expects fourth-quarter revenue to fall by about 27%. It previously forecast a 15% decrease.
Sodexo made the announcement as it reported a 31.2% year-over-year decline in fiscal third-quarter revenue to €3.91 billion.
All of its segments incurred sales declines, with food services revenue dropping 44% in the quarter. Revenue from its benefits and rewards segment fell 22.8%, and facilities management services were down 2%.
"We have lost nearly one-third of our third-quarter revenues relative to last year due to COVID-19," said CEO Denis Machuel.
Meanwhile, in organic terms, group revenue for the quarter decreased 29.9%, versus the company's expectation of a 33% decline.
Sodexo's Paris-listed shares fell 5.8% to €60.76 in morning trading July 7.