MAN Q1 Deep Dive: Cautious Outlook Amid Tariff Uncertainty and Weaker Permanent Hiring

July 18, 2025 at 01:31 AM EDT

MAN Cover Image

Workforce solutions provider ManpowerGroup (NYSE: MAN) beat Wall Street’s revenue expectations in Q2 CY2025, but sales were flat year on year at $4.52 billion. Its GAAP loss of $1.44 per share was significantly below analysts’ consensus estimates.

Is now the time to buy MAN? Find out in our full research report (it’s free).

ManpowerGroup (MAN) Q2 CY2025 Highlights:

Revenue: $4.52 billion vs analyst estimates of $4.36 billion (flat year on year, 3.6% beat)
EPS (GAAP): -$1.44 vs analyst estimates of $0.70 (significant miss)
Adjusted EBITDA: $85.6 million vs analyst estimates of $95.93 million (1.9% margin, 10.8% miss)
EPS (GAAP) guidance for Q3 CY2025 is $0.82 at the midpoint, beating analyst estimates by 10.5%
Operating Margin: -0.6%, down from 2.2% in the same quarter last year
Organic Revenue fell 1.3% year on year (-3.3% in the same quarter last year)
Market Capitalization: $2.05 billion

StockStory’s Take

ManpowerGroup’s first quarter drew a negative market reaction, driven by profit results that fell well short of Wall Street’s expectations despite revenue coming in above forecasts. Management attributed the quarter’s performance to persistent weakness in Europe and North America, particularly in permanent recruitment, alongside soft outplacement activity. CEO Jonas Prising described employer sentiment as significantly more cautious following recent trade policy shifts, stating, “Most of our clients are adopting a wait-and-see approach,” while highlighting solid demand in Latin America and Asia Pacific. The company also continued to implement cost reductions, especially in Northern Europe, in response to ongoing regional pressures.

Looking ahead, ManpowerGroup’s guidance reflects continued uncertainty from evolving trade policies and region-specific challenges, with management anticipating ongoing softness in Europe and North America. CFO Jack McGinnis noted that the company’s outlook is cautious, pointing to tariff-related uncertainty and elevated tax rates in France as key headwinds for the next quarter. Prising added, “We expect employers to continue to cautiously look at hiring select talent, particularly though with in-demand skills that enable their businesses to transform.” The company is focusing on upskilling workers for AI-driven roles and advancing its digitization strategy, but does not see a major rebound until employer confidence returns.

Key Insights from Management’s Remarks

Management cited ongoing regional divergence, with strength in Latin America and Asia Pacific offset by continued challenges in Europe and North America. The main deviations from expectations stemmed from weaker permanent hiring and reduced outplacement volumes.

Permanent recruitment pressures: Management highlighted that permanent hiring softened further, especially in France and select European markets, as employers chose to delay or freeze hiring decisions amid uncertain economic and trade conditions. The pullback was most pronounced in lower-skill roles, while demand for specialized technical talent remained more resilient.
Cost actions and restructuring: ManpowerGroup executed additional cost reduction efforts during the quarter, particularly in Northern Europe, where difficult market conditions led to further restructuring. CFO Jack McGinnis indicated that these actions are expected to deliver margin benefits by the end of the year, with a typical payback period of around nine months.
Segment and geographic trends: The Americas, led by the U.S. and Latin America, showed relative stability, with the U.S. Manpower brand delivering growth and Japan maintaining consistent expansion. In contrast, Northern Europe and Germany continued to face significant headwinds due to weak manufacturing activity and economic uncertainty.
Staffing margins and business mix: While staffing margins held up thanks to disciplined pricing and business mix changes, overall gross profit margin declined due to weaker permanent recruitment and lower outplacement activity, particularly in the Right Management segment.
Technology and digitization: The company continued to invest in its technology transformation, including the rollout of its cloud-enabled front office and shared service centers. Management sees early benefits in recruiter productivity and expects additional margin improvement as digital initiatives scale and operational leverage returns.

Drivers of Future Performance

ManpowerGroup’s near-term outlook is shaped by employer caution, ongoing regional divergence, and the unknown impact of trade policy changes, with management emphasizing cost discipline and digital transformation as key levers.

Tariff and policy uncertainty: Management noted that recent U.S. trade policy announcements have created additional uncertainty, leading employers—especially in Europe—to pause hiring. The company believes a quick resolution of trade disputes could drive a rapid improvement in demand, but current guidance does not assume any near-term policy changes.
Regional divergence persists: While Latin America and Asia Pacific are expected to remain growth areas, management anticipates continued challenges in key European markets and a low single-digit revenue decline in the U.S. Staffing demand is holding up better than permanent hiring, but overall momentum is likely to remain subdued until employer confidence improves.
Technology-driven productivity gains: Ongoing investments in digitization, process standardization, and AI-powered workforce solutions are expected to yield efficiency gains and strengthen differentiation. Management expects margin benefits to materialize from 2026 onward as shared service adoption expands and transformation spending declines.

Catalysts in Upcoming Quarters

In the quarters ahead, the StockStory team will be closely monitoring (1) signs of stabilization or improvement in permanent recruitment and outplacement volumes, (2) the pace and impact of cost-saving measures and restructuring, particularly in Northern Europe, and (3) the realization of efficiency gains from ManpowerGroup’s digital transformation initiatives. Additionally, any resolution or escalation of trade policy disputes will be a critical driver for employer sentiment and demand.

ManpowerGroup currently trades at $44.36, up from $43.13 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free).

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