Kelly Services Reports 5.8% Revenue Decline and 40% Drop in Net Earnings for Q2 2026

Kelly Services, Inc. reported a decline in financial performance for the second quarter of 2026, with revenue from services totaling $1,038.2 million, down 5.8% from $1,101.8 million in the same period last year. The company's net earnings also fell significantly, reaching $11.4 million compared to $19.0 million in the prior year, marking a 40% decrease. Basic earnings per share were $0.31, down from $0.52 a year earlier. The decrease in revenue and profitability was attributed to declines in staffing services across its Enterprise Talent Management (ETM), Science, Engineering & Technology (SET), and Education segments.

In terms of operational metrics, the company experienced a decrease in gross profit, which fell to $212.0 million from $225.5 million, primarily due to lower revenue volume. The gross profit rate slightly decreased to 20.4% from 20.5%. Selling, general, and administrative (SG&A) expenses also decreased by 5.5% year-over-year, reflecting the company's ongoing efforts to manage costs amid declining revenues. The company incurred $2.9 million in integration and realignment costs during the quarter, a reduction from $6.0 million in the same quarter of 2025.

Kelly Services has been actively restructuring its operations, including the alignment of government customers from the ETM segment to the SET segment to enhance service delivery. The company reported a total of 31,435,902 shares of Class A common stock and 3,296,041 shares of Class B common stock outstanding as of July 27, 2026. The company’s cash and cash equivalents stood at $28.0 million at the end of the second quarter, down from $37.7 million at year-end 2025, reflecting a net cash outflow of $31.2 million from financing activities.

Looking ahead, Kelly Services anticipates that improving demand trends will support its strategic initiatives aimed at driving profitable growth and long-term value creation. The company remains focused on aligning resources with demand and maintaining operational efficiency. Despite the challenges faced in the current fiscal period, management expressed confidence in the company's ability to capitalize on market opportunities as conditions improve. The company continues to monitor its liquidity and capital resources closely, with available capacity on its credit facilities providing a buffer for future operational needs.