The Compass Group PLC (LSE:CPG) upgrade to revenue guidance was "largely expected", according to UBS, though the improvement in the profit outlook is above market expectations.
Organic revenues grew by 8.6% in 3Q25, above consensus expectations for growth of circa 7.7%.
Guidance for organic revenue growth and operating profit growth was increased and the group announced the €1.5 billion acquisition of Dutch food service business Vermaat Groep.
Organic revenue growth is now expected to be above 8.0%, up from greater than 7.5% previously, though the consensus forecast was already at 8.0%, UBS noted.
However, operating profit growth is now expected to be towards 11% on a constant currency basis vs "high single digit" growth previously.
With Compass highlighting around a $13 million impact to operating profit from FX, equaing to around a 0.4% headwind, UBS said it was now forecasting growth in operating profit on an actual FX basis to be circa 10.6%, up from its prior 9.6% estimate and the former consensus of 9.2%, both on an actual FX basis.
Mamta Valechha, consumer discretionary analyst at Quilter Cheviot, said it was a "good quality trading update".
She highlighted growth across regions, especially 9.6% in North America, which accounts for around 65% of revenue, as it benefited from favourable hospitality events.
"Compass continues to have quite a resilient business model, which is flexible and has significant scale," the Quilter analyst said.
"Sourcing is predominantly local, and the group remains well placed to benefit from any increase in outsourcing due to macroeconomic pressures."