Kelly Services, Inc. (KELYB): BCG Matrix [11-2024 Updated]
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Kelly Services, Inc. (KELYB) Bundle
In 2024, Kelly Services, Inc. (KELYB) presents a dynamic mix of business segments as analyzed through the Boston Consulting Group Matrix. The company showcases Stars like the Science, Engineering & Technology segment, which boasts a remarkable revenue growth of 37.1%. Meanwhile, the Cash Cows such as the Professional & Industrial segment continue to provide significant revenue streams despite challenges. However, not all segments are thriving; the Dogs category highlights the struggles faced in the international market, while the Question Marks indicate potential risks and uncertainties, particularly in the Education and Outsourcing & Consulting segments. Dive deeper to explore how these dynamics shape Kelly Services' future in the competitive landscape.
Background of Kelly Services, Inc. (KELYB)
Founded in 1946, Kelly Services, Inc. is a global leader in workforce solutions, offering staffing services, outsourcing, and consulting across various sectors. The company is headquartered in Troy, Michigan, and operates in more than 40 countries around the world.
Kelly Services initially started as a temporary staffing agency, focusing on placing office workers. Over the years, it expanded its service offerings to include professional staffing in fields such as engineering, information technology, and education.
As of 2024, Kelly Services operates through four primary segments: Professional & Industrial (P&I), Science, Engineering & Technology (SET), Education, and Outsourcing & Consulting (OCG). Each segment provides tailored workforce solutions, including staffing, permanent placement, and outcome-based services.
In January 2024, the company sold its EMEA staffing operations, a strategic move that reflects its focus on the North American market and streamlining its operations. This decision followed the acquisition of Motion Recruitment Partners, LLC in May 2024, which was aimed at enhancing its capabilities in technology staffing and consulting solutions.
Financially, Kelly Services has faced challenges, with a reported revenue from services of $3.14 billion for the year-to-date period ending September 2024, down from $3.60 billion in the same period of the previous year, primarily due to the sale of its EMEA operations. Despite this, the company continues to adapt by focusing on higher-margin segments and expanding its service offerings to meet evolving market demands.
As of the third quarter of 2024, Kelly Services demonstrated a gross profit of $641.1 million, reflecting a decrease from $723.2 million in the previous year, influenced by a shift in business mix and lower demand for certain staffing services. The company remains committed to leveraging its extensive experience and market presence to navigate the competitive landscape of workforce solutions.
Kelly Services, Inc. (KELYB) - BCG Matrix: Stars
Science, Engineering & Technology (SET) Segment
The Science, Engineering & Technology (SET) segment of Kelly Services reported a strong revenue growth of 37.1% for the third quarter of 2024, reaching $405.2 million compared to $295.7 million in the same quarter of 2023. This growth was significantly driven by the acquisition of Motion Recruitment Partners (MRP), which contributed $124.6 million in revenue for the quarter.
The gross profit margin in the SET segment increased to 24.4%, reflecting the success of higher-value service offerings.
Education Segment
The Education segment also demonstrated robust performance, with revenue increasing by 10.9% to $142.1 million for the third quarter of 2024, up from $128.1 million in the prior year. This growth was attributed to strong demand and successful new customer acquisition strategies.
Outsourcing & Consulting Segment
In the Outsourcing & Consulting segment, revenue rose by 6.0%, amounting to $121.0 million for the third quarter of 2024. This indicates stable demand for talent solutions, with the segment continuing to perform well amid market changes.
| Segment | Q3 2024 Revenue ($ million) | Q3 2023 Revenue ($ million) | Year-over-Year Growth (%) | Gross Profit Margin (%) |
|---|---|---|---|---|
| Science, Engineering & Technology | 405.2 | 295.7 | 37.1 | 24.4 |
| Education | 142.1 | 128.1 | 10.9 | N/A |
| Outsourcing & Consulting | 121.0 | 114.1 | 6.0 | N/A |
The strong performance of the SET segment, along with the growth in the Education and Outsourcing & Consulting segments, positions Kelly Services' Stars effectively within the BCG Matrix. These segments not only exhibit high market share but also potential for sustained growth, making them critical areas for investment and strategic focus.
Kelly Services, Inc. (KELYB) - BCG Matrix: Cash Cows
Professional & Industrial Segment
The Professional & Industrial (P&I) segment remains a significant revenue driver for Kelly Services, contributing $1.09 billion year-to-date in 2024, despite experiencing a 7.3% year-over-year decline.
This segment continues to generate consistent gross profits, with a gross profit rate of 17.7%.
Education Segment
The Education segment has shown stable profitability, reporting a profit of $27.5 million year-to-date, an increase from $22.2 million in the previous year.
| Segment | Year-to-Date Revenue (2024) | Year-to-Date Profit (2024) | Year-to-Date Profit (2023) | Year-over-Year Change |
|---|---|---|---|---|
| Professional & Industrial | $1.09 billion | $23.0 million | $7.7 million | 198.4% |
| Education | $683.1 million | $27.5 million | $22.2 million | 24.0% |
Kelly Services, Inc. (KELYB) - BCG Matrix: Dogs
International Segment Ceased Operations
The international segment of Kelly Services, Inc. ceased operations with the sale of its EMEA staffing operations, which was completed on January 2, 2024. This transaction resulted in a complete revenue drop in this area, with the international revenue decreasing from $604.7 million in 2023 to $0 in 2024, reflecting a 100% decline.
Permanent Placement Fees in P&I Segment
In the Professional & Industrial (P&I) segment, permanent placement fees decreased significantly by 35.3% year-over-year. The permanent placement revenue, which typically has low direct costs, saw a decline from $78.5 million in 2023 to approximately $50.8 million in 2024, indicating low market demand.
Outsourcing & Consulting Segment Decline
The Outsourcing & Consulting segment experienced a decline in gross profit, primarily driven by a shift in business mix and increased costs. For the nine months ended September 29, 2024, gross profit in this segment was reported at $108.9 million, down from $124.4 million in the same period in 2023, representing a decrease of 12.5%.
| Segment | 2023 Revenue (in millions) | 2024 Revenue (in millions) | Change (%) |
|---|---|---|---|
| International | 604.7 | 0 | -100% |
| P&I Permanent Placement | 78.5 | 50.8 | -35.3% |
| Outsourcing & Consulting Gross Profit | 124.4 | 108.9 | -12.5% |
Kelly Services, Inc. (KELYB) - BCG Matrix: Question Marks
The Education Segment
The Education segment's profitability is under pressure, reporting a loss of $3.3 million in Q3 2024, despite increased revenues of $142.1 million in the same quarter, which represents a 10.9% increase compared to Q3 2023.
For the year-to-date results, the Education segment generated revenues of $683.1 million, an increase of 17.0% from $583.9 million in the previous year.
P&I Segment Challenges
The Professional & Industrial (P&I) segment faces challenges with declining staffing service revenue due to lower hours volume. Revenue from services was $370.4 million in Q3 2024, down 2.0% from $378.0 million in Q3 2023. Year-to-date, the segment's revenue dropped to $1,086.5 million, a 7.3% decline from $1,171.4 million the prior year.
Outsourcing & Consulting Risks
The Outsourcing & Consulting segment's reliance on lower-margin services poses a risk for future profitability. In Q3 2024, this segment reported revenues of $121.0 million, a 6.0% increase from $114.1 million in Q3 2023. Year-to-date, revenue stood at $346.0 million, slightly up from $342.4 million last year.
Despite the revenue increase, the gross profit margin is being pressured, as seen in the gross profit of $36.4 million for Q3 2024, compared to $41.5 million in Q3 2023.
MRP Acquisition Impact
The impact of the MRP acquisition on long-term growth remains uncertain. For Q3 2024, MRP contributed $124.6 million in revenue and $2.3 million in net earnings. Year-to-date, MRP's contribution was $164.6 million in revenue and $3.9 million in net earnings.
Pro forma revenues for the third quarter of 2024, including MRP, were $1,038.1 million, down from $1,254.0 million in Q3 2023. Pro forma net earnings for the same period were $1.9 million, compared to $6.8 million the previous year.
| Segment | Q3 2024 Revenue (in millions) | Q3 2023 Revenue (in millions) | Year-to-Date 2024 Revenue (in millions) | Year-to-Date 2023 Revenue (in millions) |
|---|---|---|---|---|
| Education | 142.1 | 128.1 | 683.1 | 583.9 |
| Professional & Industrial | 370.4 | 378.0 | 1,086.5 | 1,171.4 |
| Outsourcing & Consulting | 121.0 | 114.1 | 346.0 | 342.4 |
| MRP Contribution | 124.6 | N/A | 164.6 | N/A |
In summary, Kelly Services, Inc. (KELYB) presents a mixed portfolio according to the BCG Matrix, showcasing strong growth in its SET segment and stable revenue from its Cash Cows, while facing significant challenges in its Dogs and Question Marks categories. The company's ability to navigate these dynamics, particularly through strategic integration of the MRP acquisition and addressing profitability pressures in the Education segment, will be crucial for sustaining competitive advantage and driving future growth.
Updated on 16 Nov 2024
Resources:
- Kelly Services, Inc. (KELYB) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Kelly Services, Inc. (KELYB)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Kelly Services, Inc. (KELYB)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.