Adecco Sinks to Decade Low as Revenue Growth Fails to Convince

Adecco's 5.3% organic revenue growth and profit rise failed to offset a gross margin slip and €178M cash outflow, sending shares to a 10-year low.

The disconnect between Adecco’s headline numbers and its stock price could hardly be starker. Europe’s largest staffing firm posted a 5.3% organic revenue gain in the first quarter, a 41% jump in net profit to €69 million, and an adjusted operating profit that rose 12% to €148 million. Yet investors sent the shares to a 10-year low, underscoring how far accounting profits can stray from what the market actually values.

Revenue came in at €5.66 billion, roughly 2% above the prior year and ahead of the consensus estimate of €5.57 billion. The group’s core Adecco brand saw a 7% increase, while the Americas unit surged 15%. Those top-line beats, however, were overshadowed by two persistent headaches: a worsening gross margin and a cash flow hole far deeper than anyone had anticipated.

The gross margin slipped 60 basis points to 18.8%, falling short of both the 18.9% consensus and the company’s own guidance for near-stability from the prior quarter’s 19.1%. Management blamed negative mix effects and warned of a further sequential decline in the current period, compounded by rising administrative costs. The EBITA margin of 2.6% stayed well shy of the 3% target the group has been chasing for years.

Cash flow painted an even grimmer picture. Adecco burned through €178 million in operating cash during the first three months — more than four times the €41 million outflow analysts had penciled in. UBS noted that the company is struggling to convert its positive revenue momentum into profit growth, while Bernstein forecast significant cuts to operating profit estimates. The market reaction was brutal: on May 13 alone, the stock plunged 13% to a 52-week trough. Over the following week the damage totalled nearly 19%.

The shares now trade at €16.34, down roughly 35% since the start of 2026 and about 43% below the July 2025 high of €28.64. That marks the weakest level in a decade, with the downtrend that began in mid-February accelerating after the earnings miss.

Amid the sell-off, management took an unusual step to conserve cash. For the 2025 dividend payout, roughly 53% of shareholders elected to receive new shares rather than cash. Adecco issued about 5.3 million new equity at CHF16.94 each — a 6% discount to the reference price of CHF18.02. The move helped keep money in the till but did nothing to stem the stock’s slide.

On a more encouraging note, some large holders added to their stakes. London-based Silchester International, a long-time Adecco backer since 2018, increased its position during the first quarter. Board members also snapped up shares on the Swiss exchange in April, a sign of confidence from those closest to the business. Yet insider buying alone rarely reverses a broken trend, and the second-quarter outlook offers little immediate comfort.

The next set of quarterly numbers, due in the summer, will be the key test. Investors will be watching closely to see whether the cash drain has eased and whether the group can finally push its EBITA margin past the 3% threshold. Until then, Adecco’s message of growth without liquidity — and profit without margin — looks unlikely to win the market over.