Sodexo starts the fiscal year with success in its corporate and events businesses but low enrollment at universities impacted growth in education

While Sodexo saw growth in its corporate and events services in the first fiscal quarter of the year, its growth was impacted by low enrollment in the education segments.

The fiscal year started off slow, as expected by the France-based foodservice provider, with organic revenue growth of 5.9% in the U.S.

“We anticipated a slowdown in organic growth during H1 with a step up in H2 for fiscal year 25 and the Q1 turnout is consistent with that and in line with our expectations,” said Sébastien de Tramasure, Sodexo’s chief financial officer, in a call to investors on Jan.7. “H2 last year was very strong. Q4, was strong. Q1 this year is strong. And we have a very, very solid pipeline, very confident.”

The company did see some success due to the continued return-to-office with organic growth of 9% in the business and administration sector. Sodexo Live! had a particularly strong quarter with attendance at conference centers, stadiums and arenas increasing significantly. The sports and entertainment foodservice provider saw organic growth of 24.8%.

“Sodexo Live! benefited from strong attendance at venues, growth in airline lounges with higher volume and the impact of new contracts, and the timing of key events,” said Tramasure. “Corporate continued to see momentum with more people returning to offices and strong performance in foodservices.”

Lower enrollment at universities and weather-related closures in schools as well as contract losses led to some challenges in the education segments.

Tramasure noted that this lower enrollment is associated with some challenges in receiving federal financial aid in sufficient time, but the company does expect some improvement in the spring semester.

Sodexo’s healthcare segment also saw some growth thanks to price and volume increases, but this growth was partially offset by losses in senior living last year.

Sodexo also placed a focus on sustainability in Q1 of fiscal 2025 through various efforts including its Sustainable Food Barometer which revealed consumer demand for sustainable dining. The company also held its third Sustainable Chef Challenge which brought together different Sodexo chefs from throughout the world to compete in creating sustainable dishes. And the foodservice provider has teamed up with Eaternity, a sustainable dining solutions company, to measure the impact of its recipes by calculating the carbon emissions of the ingredients.

Looking forward, the company expects to see organic revenue growth for the fiscal year between 5.5% and 6.5%.

“We are encouraged by the strong commercial momentum at the start of the year, marked by major contract wins and renewals, aligned with our expectations of modest growth in the first half of the year and an acceleration in the second half, driven by the timing of net new business contributions,” said Sophie Bellon, CEO at Sodexo, in a statement. “We are committed to delivering on our guidance for the year.”