Compass Group forecast slightly slower than expected 2025 profit growth as the British contract catering firm announced plans to exit some smaller markets such as Mexico and Colombia.
Shares in the world's largest caterer, which operates in 30 markets, fell 3% in early trade, as the outlook overshadowed its fiscal 2024 results, which largely met market expectations after the group twice upgraded profit and revenue forecasts.
Compass has doubled down on its core markets through acquisitions, including in France and Norway since the end of September. But it has exited non-core markets such as China, the United Arab Emirates and Brazil over the past year and said it would also leave Chile and Kazakhstan.
"Our priority is to invest in the business through capital expenditure and M&A to support future growth, with surplus capital being returned to shareholders," CEO Dominic Blakemore said in a statement.
Jefferies analysts said Compass shares were also under pressure from the absence of a further share buyback announcement on Tuesday.
Performance Highlights
Compass expects high single-digit growth in underlying operating profit for its financial year to end-September 2025. Analysts had forecast profit of $3.30 billion (€3.1 billion), according to a company-compiled poll, implying growth of about 10% from the $3 billion (€2.9 billion) reported for the 2024 fiscal year just ended.
The caterer grew rapidly after the pandemic as elevated inflation drove many employers to outsource their canteen operations.
Its 2025 organic revenue growth forecast of above 7.5% is roughly in line with market expectations, after reporting 10.6% growth in fiscal 2024.
French caterer Elior said last week that it expects revenue growth to slow in the year from 1 October, echoing comments from rival Sodexo in October.
Compass, which caters to staff and students at the likes of Microsoft, Shell and Harvard Business School, said it was confident it would sustain mid-to-high single-digit organic revenue growth over the longer term.
