Company: KELYB
Filing Date: 2025-05-08
Form Type: 10-Q
Source: 0000055135-25-000016
Chunk: 29

Company: KELLY SERVICES INC
Filing Date: 2025-05-08
Form: 10-Q
Item: Part I, Item 1
Chunk 29
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, gross profit decreased 1.1%.  The gross profit rate increased 60 basis points to 20.3% primarily due to a 90 basis point increase due to the acquisition of MRP, partially offset by a 20 basis point decrease related to lower permanent placement fees and a 10 basis point decrease related to business mix and other.  Permanent placement revenue has very low direct costs of services and has a disproportionate impact on gross profit rates.  The gross profit rate decreased in the ETM and SET segments excluding the acquisition and increased in the Education segment.

Total SG&A expenses increased 18.5%, primarily due to the acquisition of MRP.  Excluding the impact of the acquisition, SG&A expenses increased 1.0%.  SG&A expenses in the first quarter of 2025 include $10.7 million of integration and realignment costs related to initiatives to integrate MRP and other prior acquisitions, consolidating operating segments, and further aligning processes and technology across the Company, $0.3 million of transaction costs related to the sale of our EMEA staffing operations, and $0.3 million of executive transition charges.  Included in SG&A expenses in the first quarter of 2024 were $5.6 million of transaction costs related to the sale of our EMEA staffing operations and $2.3 million of transformation and restructuring charges relating to 2023 initiatives.  Excluding the impact from the acquisition, as well as integration and realignment, transaction, executive transition, and restructuring and transformation charges—and excluding depreciation and amortization—SG&A expenses were flat to the prior year.

The gain on sale of EMEA staffing operations relates to the completion of the sale in January 2024 in which we had recognized a gain of $11.6 million as of first quarter-end 2024.

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Gain on forward contract of $1.2 million represents the gain recognized in the first quarter of 2024 for the settlement of the foreign currency forward contract in January 2024 that was entered into in 2023 relating to the sale of the EMEA staffing operations.

Income tax expense was $1.8 million for the first quarter of 2025 compared to $4.0 million for the first quarter of 2024, with the decrease primarily related to changes in pretax income.

30 

Operating Results By Segment

(Dollars in millions)

First Quarter20252024% ChangeRevenue from Services:Enterprise Talent Management$534.0 $524.1 1