ManpowerGroup enters the second half of the year with the clearest demand improvement it has posted in two years, and the second-quarter print shows the operating recovery finally landing on the income statement. Revenues from services rose 7.5% in the quarter, or 5.8% at constant currency, with the Manpower staffing brand driving demand across the Americas, Italy, Spain, Poland and the Nordics while Experis interim activity continued to fade. Operating profit swung from a loss a year earlier to $112.0 million. The operating margin printed 2.3% against a prior-year loss. Management now says 2026 represents an important inflection point for the transformation strategy it has been running since 2023.
The catch is how much of that swing is noise rather than structural progress. The prior year carried an $88.7 million goodwill and indefinite-lived intangible impairment in Switzerland and the United Kingdom, and the current year carried a $30.0 million pre-tax gain from selling the Jefferson Wells U.S. finance and accounting business. Gross margin actually fell 80 basis points to 16.1% because lower-margin enterprise staffing mix and the Jefferson Wells divestiture are now the norm. Strip those items out and the underlying operating improvement is real but modest, closer to a couple hundred basis points of margin expansion rather than the headline 290.
The balance sheet story runs in the opposite direction from the multiple. ManpowerGroup redeemed its 2018 euro notes in January 2026. Total debt fell to $1.04 billion. Net debt to EBITDA sits at 2.51 times against the covenant. Cash fell as the Jefferson Wells proceeds went straight to the debt. Total available liquidity is $930.2 million. The stock carries a 25.6 times trailing multiple but only 11.7 times forward earnings. It has doubled off its trough while sitting below the recent high.
The debate is whether a cyclical staffing recovery plus a leaner cost base justifies a multiple that already embeds the turnaround. The strongest evidence for the bull case is the Americas and Southern Europe demand inflection and the debt reduction; the strongest counterargument is that gross margin is still contracting on mix, Experis remains in decline, and an effective tax rate of 42.0% means a large share of operating improvement dies at the tax line. The forward variables to watch are whether constant-currency revenue growth holds near or above 5%, whether gross margin stabilizes at 16.5% or higher, and whether the Japan Fair Trade Commission investigation into the temporary staffing industry escalates into a fine or conduct remedy.