Rentokil Stock Tumbles on Profit Warning

Core Insights - Rentokil Initial shares fell significantly after the company announced a profit hit of $104.5 million for the year due to weak performance in North America and currency fluctuations [1] Group 1: Financial Impact - The company expects a reduction in full-year earnings by 80 million pounds ($104.5 million) primarily due to slow sales in North America and negative currency impacts [1] - Rentokil anticipates a loss of 20 million pounds ($26.1 million) in adjusted operating profit from its North American operations due to slower revenue growth [1] - An additional 50 million pounds ($65.2 million) hit to adjusted operating profit is attributed to higher-than-expected expenses on materials and consumables [1] Group 2: Operational Challenges - The company ramped up operations to meet peak season demand in North America but faced slowing demand, leading to over-resourcing in sales and service [1] - Despite some positive sales momentum in the second quarter, the trading performance in July and August was lower than anticipated [1] Group 3: Currency Effects - The appreciation of the pound against the U.S. dollar is expected to create an additional headwind of 10 million pounds ($13 million) for the company if current rates persist [1] Group 4: Market Reaction - Following the profit warning, Rentokil Initial shares dropped 21% to $24.94 in intraday trading, marking a nearly 13% decline in value since the beginning of the year [1]