ManpowerGroup Swings to Loss Amid European Impairments

Ticker: MAN · Form: 10-Q · Filed: 2025-10-31T00:00:00.000Z

Sentiment: bearish

Topics: Staffing Industry, Goodwill Impairment, Net Loss, European Market, Cash Flow Negative, Macroeconomic Headwinds, Shareholder Equity Decline

Related Tickers: MAN, RHI, KFRC, ALLE

TL;DR

**ManpowerGroup's Q3 results are a red flag, with a net loss and significant European impairments signaling tough times ahead; I'm bearish on MAN.**

AI Summary

ManpowerGroup Inc. reported a net loss of $43.5 million for the nine months ended September 30, 2025, a significant decline from net earnings of $122.6 million in the same period of 2024. Revenues from services also decreased to $13,244.0 million for the nine months ended September 30, 2025, down from $13,454.2 million in 2024. The company recognized a non-cash goodwill impairment loss of $33.4 million for its United Kingdom reporting unit and $24.7 million for its Switzerland reporting unit during the second quarter of 2025, totaling $58.1 million, due to deteriorating macroeconomic conditions and underperforming financial results. Additionally, a full impairment of $30.6 million was recorded for the reacquired franchise right associated with the Switzerland business. Operating profit for the nine months ended September 30, 2025, plummeted to $69.5 million from $237.8 million in the prior year, largely impacted by the $88.7 million in impairment charges. Cash and cash equivalents decreased from $509.4 million at December 31, 2024, to $274.6 million at September 30, 2025, with net cash used in operating activities totaling $283.0 million. The company's strategic outlook is challenged by current macroeconomic conditions in North America and Europe, leading to lower near-term revenue growth and operating unit profit margin assumptions.

Why It Matters

ManpowerGroup's significant net loss and goodwill impairments in key European markets signal a challenging operating environment, particularly for investors concerned about profitability and asset valuation. The decline in cash from operations could impact the company's ability to fund future growth or return capital to shareholders, potentially affecting dividend stability and share repurchase programs. For employees, these results might indicate a cautious hiring outlook or restructuring in affected regions. Competitively, this downturn could allow rivals with stronger balance sheets or more resilient market positions to gain market share, especially in the struggling European staffing sector, impacting ManpowerGroup's long-term competitive standing.

Risk Assessment

Risk Level: high — The company reported a net loss of $43.5 million for the nine months ended September 30, 2025, a stark contrast to net earnings of $122.6 million in the prior year. This is primarily driven by $88.7 million in impairment charges related to goodwill and intangible assets in its United Kingdom and Switzerland reporting units, indicating significant operational distress and a reevaluation of asset values in key markets.

Analyst Insight

Investors should consider reducing exposure to ManpowerGroup (MAN) given the substantial net loss, significant goodwill impairments, and negative cash flow from operations. Await clearer signs of stabilization in European markets and improved profitability before considering new positions.

Financial Highlights

debt To Equity
0.34
revenue
$13,244.0M
operating Margin
0.5%
total Assets
$8,446.9M
total Debt
$1,216.1M
net Income
-$43.5M
eps
Not Disclosed
gross Margin
Not Disclosed
cash Position
$274.6M
revenue Growth
-1.6%

Revenue Breakdown

SegmentRevenueGrowth
Global Staffing$13,244.0M-1.6%

Key Numbers

Key Players & Entities

FAQ

Why did ManpowerGroup Inc. report a net loss for the nine months ended September 30, 2025?

ManpowerGroup Inc. reported a net loss of $43.5 million for the nine months ended September 30, 2025, primarily due to $88.7 million in impairment charges. These charges included a $33.4 million goodwill impairment for its United Kingdom reporting unit and a $24.7 million goodwill impairment for its Switzerland reporting unit, along with a $30.6 million impairment of a reacquired franchise right in Switzerland.

What were ManpowerGroup's revenues from services for the nine months ended September 30, 2025?

ManpowerGroup's revenues from services for the nine months ended September 30, 2025, were $13,244.0 million. This represents a decrease compared to $13,454.2 million reported for the same period in 2024.

How did macroeconomic conditions impact ManpowerGroup's financial performance?

Deteriorating macroeconomic and local market conditions in the United Kingdom and Switzerland directly led to the recognition of $58.1 million in goodwill impairment losses. Additionally, current macroeconomic conditions in North America and Europe resulted in lower assumptions for near-term revenue growth and operating unit profit margins across several reporting units, reducing their excess fair value.

What was the change in ManpowerGroup's cash and cash equivalents?

ManpowerGroup's cash and cash equivalents decreased significantly from $509.4 million at December 31, 2024, to $274.6 million at September 30, 2025. This decline was largely driven by $283.0 million in net cash used in operating activities during the nine months ended September 30, 2025.

What specific reporting units were affected by impairment charges?

The United Kingdom reporting unit in the Northern Europe segment incurred a $33.4 million goodwill impairment loss. The Switzerland reporting unit in the Southern Europe segment incurred a $24.7 million goodwill impairment loss and a $30.6 million impairment related to a reacquired franchise right.

How did ManpowerGroup's operating profit change year-over-year?

ManpowerGroup's operating profit for the nine months ended September 30, 2025, was $69.5 million, a substantial decrease from $237.8 million for the same period in 2024. This decline is primarily attributable to the $88.7 million in impairment charges recognized in 2025.

What is the current number of ManpowerGroup's common shares outstanding?

As of October 29, 2025, ManpowerGroup Inc. had 46,297,180 shares of common stock, $.01 par value, outstanding. This figure is important for calculating per-share metrics and understanding market capitalization.

What were the key assumptions used in the goodwill impairment test for the United Kingdom reporting unit?

Key assumptions for the United Kingdom reporting unit's discounted cash flow valuation included a discount rate of 11.4%, working capital as a percentage of revenue of 6.6%, revenue growth for the next 10 years ranging from -8.4% to 10.0%, and terminal value revenue growth and OUP margin of 3.0% and 3.2%, respectively.

Did ManpowerGroup pay dividends during the nine months ended September 30, 2025?

Yes, ManpowerGroup paid dividends totaling $33.3 million during the nine months ended September 30, 2025. This is a decrease from the $73.5 million in dividends paid during the same period in 2024.

What is the significance of the increase in short-term borrowings for ManpowerGroup?

The significant increase in short-term borrowings and current maturities of long-term debt from $23.4 million at December 31, 2024, to $747.8 million at September 30, 2025, indicates a substantial shift in the company's liquidity and debt structure. This could suggest increased reliance on short-term financing to manage operations or meet obligations, potentially raising concerns about financial flexibility and interest expense in a rising rate environment.

Risk Factors

Industry Context

The global workforce solutions industry is highly sensitive to macroeconomic conditions. Companies like ManpowerGroup face challenges from economic slowdowns, which reduce demand for staffing and related services. Competition remains intense, with a focus on digital transformation and specialized talent solutions.

Regulatory Implications

While no specific new regulatory issues are highlighted, the company operates in a regulated environment concerning labor laws, data privacy, and financial reporting. Compliance with these regulations is ongoing and essential for maintaining operations.

What Investors Should Do

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Key Dates

Glossary

Goodwill Impairment
A non-cash charge recorded when the carrying value of goodwill on the balance sheet exceeds its fair value, often due to deteriorating business performance or market conditions. (Significant goodwill impairments in the UK and Switzerland ($58.1M total) contributed to the net loss and reflect poor performance in those regions.)
Reacquired Franchise Right
An intangible asset representing the right to operate a business previously franchised, which has been bought back by the company. Impairment occurs if its value diminishes. (A $30.6 million impairment was recorded for the Switzerland reacquired franchise right, further impacting profitability.)
Net Cash Used in Operating Activities
The net amount of cash spent or outflowed by a company from its core business operations over a period. (A significant negative $283.0 million for the nine months ended Sept 30, 2025, indicates operational cash burn, a major concern.)
Debt-to-Equity Ratio
A financial leverage ratio that divides total liabilities by total shareholders' equity, indicating how much debt a company is using to finance its assets relative to the value of shareholders' equity. (Calculated as (747.8M + 468.3M) / 2011.4M = 0.60, showing the company's leverage.)

Year-Over-Year Comparison

Compared to the prior year, ManpowerGroup has experienced a significant downturn. Revenues from services have slightly decreased from $13,454.2 million to $13,244.0 million for the nine-month period. More critically, operating profit has plummeted from $237.8 million to $69.5 million, heavily impacted by $88.7 million in impairment charges not present in the prior year. The company's cash position has weakened considerably, with cash and cash equivalents falling from $509.4 million to $274.6 million, and operating cash flow turning negative ($283.0 million used vs. $61.6 million provided). Short-term debt has surged from $23.4 million to $747.8 million.

Filing Stats: 4,443 words · 18 min read · ~15 pages · Grade level 7 · Accepted 2025-10-31 16:31:03

Filing Documents

Financial Statements (unaudited)

Financial Statements (unaudited) Consolidated Balance Sheets 3 - 4 Consolidated Statements of Operations 5 Consolidated Statements of Comprehensive (Loss) Income 5 Consolidated Statements of Cash Flows 6 Consolidated Statements of Shareholders' Equity 7 -8

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 9 - 25 Item 2

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 26 - 40 Item 3

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 40 Item 4

Controls and Procedures

Controls and Procedures 41 PART II OTHER INFORMATION Item 1A

Risk Factors

Risk Factors 42 Item 2 Unregistered Sales of Equity Securities and Use of Proceeds 42 Item 5 Other Information 42 Item 6 Exhibits 43

SIGNATURES

SIGNATURES 44 2 PART 1

- FINANC IAL INFORMATION

PART I - FINANC IAL INFORMATION

– Financial St atements (unaudited)

Item 1 – Financial St atements (unaudited) ManpowerGroup Inc. Consolidated Balance Sheets (Unaudited) (in millions) ASSETS September 30, 2025 December 31, 2024 Cash and cash equivalents $ 274.6 $ 509.4 Accounts receivable, less allowance for expected credit losses of $ 79.1 and $ 67.6 , respectively 4,632.3 4,297.2 Prepaid expenses and other assets 194.0 163.7 Total current assets 5,100.9 4,970.3 Other Assets: Goodwill 1,543.9 1,563.4 Intangible assets, less accumulated amortization of $ 571.8 and $ 530.4 , respectively 437.0 486.1 Operating lease right-of-use assets 402.4 361.3 Other assets 837.8 701.5 Total other assets 3,221.1 3,112.3 Property and Equipment: Land, buildings, leasehold improvements and equipment 543.2 488.2 Less: accumulated depreciation and amortization 418.3 369.8 Net property and equipment 124.9 118.4 Total assets $ 8,446.9 $ 8,201.0 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. 3 PART 1 ManpowerGroup Inc. Conso lidated Balance Sheets (Unaudited) (in millions, except share and per share data) LIABILITIES AND SHAREHOLDERS' EQUITY September 30, 2025 December 31, 2024 Current Liabilities: Accounts payable $ 2,577.5 $ 2,612.9 Employee compensation payable 238.2 241.1 Accrued payroll taxes and insurance 629.2 615.2 Accrued liabilities 427.9 475.1 Value added taxes payable 396.4 370.8 Short-term operating lease liability 106.9 98.6 Short-term borrowings and current maturities of long-term debt 747.8 23.4 Total current liabilities 5,123.9 4,437.1 Other Liabilities: Long-term debt 468.3 929.4 Long-term operating lease liability 314.1 279.0 Other long-term liabilities 529.2 428.6 Total other liabilities 1,311.6 1,637.0 Shareholders' Equity: ManpowerGroup shareholders' equity Preferred stock, $ .

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