TrueBlue, Inc. (NYSE:TBI) Q3 2020 Earnings Conference Call - Final Transcript
Oct 26, 2020 • 05:00 pm ET
[Operator Instructions] Your first question comes from Mark Marcon from Baird. Please go ahead.
Hey, good afternoon, Patrick and Derrek. Nice progress in terms of the results. Wondering if you can talk a little bit about PeopleReady and how broad based the recovery was from month-to-month, particularly like how much of it was construction and were there any sort of regional patterns that you ended up seeing?
Derrek L. Gafford
Hey Mark, thanks for the question, Derrek here. So it was very broad based. If we went and took a look by industry, we saw progress in every industry. If we take a look at what the year-over-year decline was in each of the industries and compare Q3 to Q2 with the exception of retail and it's only because retail, we had a lot of surge business in the second quarter, but on an absolute basis, retail is still our best industry. So it's the industry with the least amount of decline in it. And the same goes for states, we could go and take a look at all of our states and there is a little give and take here and there some caused by project work, but we saw improvement throughout the quarter. I won't go state by state, but California, Texas, and Florida make up about 35% of PeopleReady's revenue and we saw pretty consistent improvement in all three of those states throughout the quarter and into the first three weeks of October as well.
Great. Can you talk a little bit about your plans for SG&A both from a short-term perspective and then if you could elaborate a little bit on the longer-term opportunities. It sounds like we are going to go through potentially some more centralization, particularly on the PeopleReady side basically getting there through attrition as opposed to something that would be perhaps more dramatic, but just trying to understand like based on where things sit now, where we think like SG&A as a percentage of revenue could end up getting through on the PeopleReady side longer-term as JobStack continues to gain traction?
Derrek L. Gafford
Yeah, thanks for the question, Mark. So let's break it down as you suggested talk short-term and longer-term here. Let's start with the short-term just taking a look at where we stand third quarter and going into the fourth quarter. So in the third quarter, SG&A was down 31%. About 3 points of that -- between 3 points and 4 points were some government subsidies. So excluding that, call it 28%, which is still higher than what our revenue decline was. Generally, that's not -- our intent is to have SG&A go down at that level. So as we are looking into the fourth quarter, the guidance that we basically prepared is for SG&A to be down about 20%, which if you take a look at where our trends are headed as we go into October, at least for our staffing businesses, we're down in the teens. So it's directionally aligned with where the revenue