Kelly Services Inc. (NASDAQ: KELYA, KELYB) reported Covid-19 negatively affected demand in the second quarter and revenue fell 27.7% in constant currency. Net earnings also fell; however, gross margin improved.
“The impact of Covid-19 continued throughout the second quarter as closures and widespread uncertainty resulted in reduced customer demand and lower top-line growth,” President and CEO Peter Quigley said.
Education and light industrial staffing businesses were the most affected. Still, Kelly Services reported investment in the future, including a move forward with a new front-office software platform in the US during the quarter.
| (US$ millions) | Q2 2020 | Q2 2019 | % change | % constant currency |
| Revenue | $975.3 | $1,367.5 | -28.7% | -27.7% |
| Gross profit | $189.2 | $244.0 | -22.5% | -21.7% |
| Gross margin | 19.4% | 17.8% | ||
| Net earnings | $41.1 | $83.8 | -51.0% | -21.7% |
US revenue fell 29.4% while the biggest revenue decline was in Kelly Services’ Americas staffing segment.
The company noted gross margin improved because of government stimulus and pandemic relief impacts as well as lower employee-related costs and structural improvement in product mix.
Revenue by segment
| (US$ millions) | Q2 2020 | Q2 2019 | % change | % constant currency |
| Americas staffing | $326.7 | $597.6 | -45.3% | -44.1% |
| Global talent solutions | $466.9 | $505.9 | -7.7% | -7.5% |
| International staffing | $184.6 | $268.1 | -31.1% | -29.3% |
Second-quarter revenue fell across most geographies, though it rose in the Asia-Pacific region.
Revenue by geography
| (US$ millions) | Q2 2020 | Q2 2019 | % change | % constant currency |
| Americas | ||||
| United States | $700.1 | $991.3 | -29.4% | -29.4% |
| Canada | $25.6 | $33.2 | -22.7% | -19.9% |
| Mexico | $22.5 | $29.7 | -24.2% | -7.7% |
| Puerto Rico | $20.0 | $19.6 | 1.9% | 1.9% |
| Brazil | $6.1 | $8.2 | -25.1% | -0.1% |
| Europe, Middle East and Africa | ||||
| Switzerland | $47.4 | $49.9 | -4.9% | -8.6% |
| France | $39.9 | $64.6 | -38.3% | -37.1% |
| Russia | $29.3 | $28.8 | 1.4% | 13.9% |
| Portugal | $23.8 | $46.7 | -49.2% | -48.1% |
| United Kingdom | $17.8 | $30.5 | -41.6% | -39.5% |
| Italy | $13.3 | $20.7 | -35.7% | -34.5% |
| Germany | $7.1 | $9.9 | -27.8% | -26.3% |
| Ireland | $4.1 | $10.9 | -61.9% | -61.1% |
| Other EMEA | $11.5 | $16.9 | -32.1% | -27.0% |
| Asia Pacific | ||||
| Total APAC | $6.8 | $6.6 | 4.4% | 10.8% |
Share price and market cap
Shares in KELYA were up 5.42% to $16.73 as of 11:29 a.m. Eastern time; they were 65.15% above their 52-week low. The company had a market cap of $619.4 million.