Short Squeeze And Earnings: Why ManpowerGroup Stock Spiked Thursday

ManpowerGroup Inc. (NYSE: MAN ) shares surged Thursday after the workforce solutions company reported second-quarter results that topped Wall Street estimates and issued third-quarter earnings guidance above expectations.

The rally was likely magnified by elevated short interest, with nearly 20% of the public float sold short, signaling substantial bearish positioning that may have fueled a squeeze.

The company has a short interest of 6.75 million shares, representing 19.9% of its public float.

That elevated short interest suggests a significant number of investors are betting the stock will decline while also increasing the potential for a short-covering rally if sentiment improves.

Second-Quarter Results Beat Estimates Adjusted earnings were 99 cents per share, topping analysts’ consensus estimate of 95 cents.

Revenue rose 8% year over year to $4.86 billion, or 6% in constant currency, exceeding estimates of $4.72 billion.

On a GAAP basis, earnings were $1.13 per diluted share, compared with a loss of $1.44 per share a year earlier.

Adjusted EBITDA increased 15% year over year on a constant-currency basis to $103 million, while adjusted EBITDA margin expanded 10 basis points to 2.1%.

The company attributed the improvement to stronger client demand, better operating leverage, disciplined cost controls and improved execution across its brands and regions.

Net earnings improved to $53.5 million from a loss of $67.1 million in the prior-year quarter.

Operating profit reached $112 million, compared with an operating loss of $25.3 million a year earlier, while selling and administrative expenses fell 15.3% to $668.3 million.

The company ended the quarter with $180.6 million in cash and $1.04 billion in total debt, including $567.3 million of long-term debt.

Net debt was $863 million.

Year-to-date operating cash outflow improved to $129 million from $343 million in the prior-year period.

Chair and CEO Jonas Prising said the company benefited from “good execution across our brands and markets, continued cost discipline and improving demand,” adding that ManpowerGroup continued to advance its strategic transformation program and expand AI capabilities.

Brand and Regional Performance The Manpower brand posted its fifth consecutive quarter of growth, with constant-currency revenue rising 8%, supported by demand across manufacturing, automotive, aerospace, logistics and retail.

Experis revenue declined 2% from a year earlier, improving from a 9% decline in the first quarter, as demand strengthened for cloud, migration, application development, data and artificial intelligence capabilities.

Talent Solutions revenue was flat year over year, an improvement from the prior quarter, supported by stronger client pipelines and growth in recruitment process outsourcing (RPO) and managed service provider (MSP) offerings.

The U.S. business remained a key growth driver, with total organic days-adjusted revenue rising 8%.

Within the market, the Manpower brand grew 16% and posted its eighth consecutive quarter of growth.

By geography, revenue in the Americas increased 14.4% to $1.21 billion, including 6% growth in the United States and 29% growth in Other Americas.

Southern Europe revenue rose 7.4%, while Northern Europe increased 3.9%.

Asia Pacific Middle East (APME) revenue declined 1.2% on a reported basis but rose 5% in constant currency.

During the quarter, the company completed the sale of its Jefferson Wells U.S. business to sharpen its focus on higher-return operations.

Management also expanded the use of AI across recruiting and sales operations, including partnerships with SoundHound and IBM watsonx, to improve productivity and support future growth.

Outlook For the third quarter, ManpowerGroup forecast diluted earnings of 96 cents to $1.06 per share, including an estimated 2-cent unfavorable currency impact.

The guidance compares with analysts’ consensus estimate of 88 cents per share.

The company expects approximately 6% organic, days-adjusted constant-currency revenue growth and an effective tax rate of about 44%.

Gross profit margin is projected at about 16%, reflecting changes in business mix and the Jefferson Wells divestiture.

Adjusted EBITDA margin is expected to improve by 10 basis points from a year earlier.

The company also expanded its Global Strategic Transformation Program, targeting $200 million in permanent cost savings by 2028 through productivity improvements, cost optimization and organizational changes.

ManpowerGroup Price Action MAN Price Action: ManpowerGroup shares were up 35.24% at $52.77 at the time of publication on Thursday.

The stock was trading at a new 52-week high, according to Pro data.

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