Sodexo saw strong sales in its first fiscal quarter of 2024, thanks to pricing, new contracts, attendance at convention centers and the continued return to office. Performance was strong in all sectors, but the Seniors segment was impacted by loss of business in 2023.
The Paris-based foodservice provider reported 8.7% organic revenue growth in the first quarter in North America. Organic growth overall for the company was driven by food services, which was up 10% while facility management services were up 4.7%.
Business and Administration clearly led the quarter with organic growth of 12.1%. This growth was thanks to new business, activity in convention centers, passenger count in airline lounges and the continued return to office.
Healthcare and Seniors saw organic growth of 6.3% with strong performance in the healthcare sector thanks to price increases, volume and retail growth. However, the Senior’s business has been impacted by loss of contracts last year.
“Clearly last year we lost business. Even though retention in North America was good, we lost more in proportion in Seniors than we lost in other segments,” said Marc Rolland, Sodexo’s chief financial officer, in a conference call to investors on Jan. 5. “If I were to strip out the Senior growth out of Q1, the healthcare standalone growth would be very healthy.”
Education, meanwhile, saw growth of 7.5% driven by price increases, growth in meal count, retail and catering events.
Inflation, has been in line with expectations said Rolland.
“What we’ve experienced in Q1 is it’s clearly in line with the expectation of 3 to 4% for the year,” he said.
Food costs were close to expectations, while labor sits at about 8%.
Overall, the first quarter performance was in line with expectations and the company expects to see organic revenue growth between 6 to 8% for the year.