アドバンテージ・ソリューションズ（ADV）2026年第3四半期決算説明会：2,500万ドルのリストラ計画

アドバンテージ・ソリューションズ（NASDAQ: ADV）が発表した2026年第3四半期決算は、増収が継続したものの、ブランド・サービス部門の振るわず、また計画していた人件費投資が収益性の重荷となりました。経営陣は通期見通しを据え置くとともに、年間で約2,500万ドルの純削減効果を見込む事業構造改革プログラムを発表しました。

主要なポイント

• 事業売却の影響を除くプロフォーマ純売上高は前年同期比1%増の7億8,200万ドルとなり、4四半期連続の増収を記録しました。調整後EBITDAは12%減の8,500万ドルに減少しました。
• エクスペリエンス・サービス部門の売上高は、堅調な需要とイベント実施数の増加に支えられ、12%増の3億600万ドルとなりました。調整後EBITDAは、人件費投資が利益率を圧迫したことで0.3%増の3,500万ドルにとどまりました。
• ブランド・サービス部門の売上高は、顧客の離脱と不振なビジネスミックスにより、11%減の2億2,500万ドル、調整後EBITDAは55%減の1,800万ドルに大幅減少しました。
• リテーラー・サービス部門の売上高は1%増の2億5,100万ドル、調整後EBITDAは43%増の3,200万ドルとなりました。関税還付の好影響を除いても、調整後EBITDAは30%以上の増益でした。
• アドバンテージ・ソリューションズは、再投資を差し引いた純額で年間約2,500万ドルの削減を目指す事業構造改革を2026年第4四半期から開始すると発表しました。経営陣は長期的にはさらに少なくとも500万ドルの追加の純削減を達成する計画です。
• 通期業績予想は再確認（据え置き）されました。経営陣は引き続き、売上高成長率を横ばいから一桁台前半、調整後EBITDAを横ばいから一桁台半ばの減少と見込んでいます。

主要財務データ

年初来累計では、売上高が3%増、調整後EBITDAが3%減となりました。事業売却は第3四半期において、売上高で約500万ドル、調整後EBITDAで約300万ドルの減少要因となりました。

事業および営業業績

エクスペリエンス・サービス部門

エクスペリエンス・サービスは引き続き最も成長率の高い事業領域です。1日あたりのイベント実施数は13%以上増加し、経営陣は需要のシグナルは健全であり、イベント数の更なる拡大機会が存在すると述べています。

賃金、採用、人員確保への投資が利益成長を抑制しました。第3四半期中に価格改定の効果が現れ始めており、経営陣は今後利益率への貢献が高まると見込んでいます。

ブランド・サービス部門

ブランド・サービス部門は、顧客離脱、地域競合、顧客内製化（インソーシング）、小規模顧客の活動低迷から引き続き圧力を受けています。また、粗利益率が高い本部営業代行や代理店業務の落ち込みもビジネスミックスを悪化させました。

店頭マーチャンダイジング・プロジェクトおよびサプライチェーン・アズ・ア・サービス（SCaaS）が成長分野となりました。同社によると、サプライチェーン・ネットワークには100か所以上のオムニチャネル・フルフィルメントセンターと複数の貨物パートナーシップが含まれています。最近獲得した顧客の1社において、アドバンテージ・ソリューションズは店舗側のチャージバック（違約金等）を83%削減し、輸送時間を32%短縮させました。

新しい組織構造では、事業を4つの地域に分割し、地域ごとに損益責任を負わせます。経営陣によると、クライアントや顧客に最も近い現場の2つの組織階層は、構造改革の影響を受けません。

リテーラー・サービス部門

リテーラー・サービス部門は、プロジェクトの活発化、価格設定、新規案件獲得、ならびにデイモン（Daymon）プライベートブランド事業の好調が寄与しました。また、小売クライアント向け調達商品に関する小額の関税還付も受領しましたが、経営陣によると対象となる還付の大部分は既に受領済みであるとしています。

同社は引き続き、人員配置の最適化、店頭在庫の確実な確保、食品スーパー以外の顧客層への拡張に注力しています。

テクノロジーとコスト構造

アドバンテージ・ソリューションズは、想定される財務面および運用上のメリットがコストや移行リスクに見合わないと判断し、Workdayの導入を停止しました。同社は、ピンポイントのアップグレードやAIを活用した業務フローの改善を進めつつ、既存の人財管理プラットフォームの運用を継続する計画です。

より広範な事業構造改革には、組織階層の削減、支援部門の統合、ベンダーおよびサードパーティ支出の削減、不動産の最適化、裁量的経費の削減が含まれます。関連する構造改革および組織再編費用は合計で700万ドルから1,000万ドルと見込まれ、大半が2026年第4四半期に発生し、一部は2027年に持ち越されます。

業績予想（ガイダンス）

経営陣は2026年通期の業績予想を以下の通り再確認しました。

• 売上高成長率は前年並み（横ばい）から一桁台前半。
• 調整後EBITDAは横ばいから一桁台半ばの減少。
• 調整後アンレバード・フリー・キャッシュ・フローは2億5,000万ドルから2億7,500万ドル。
• 関連する負債調達費用控除前のEBITDAに対する純フリー・キャッシュ・フロー比率は25%。
• 設備投資額は4,000万ドルから4,500万ドル（Workdayの導入停止に伴い下方修正）。

2027年について、経営陣は現時点で設備投資額を3,500万ドルから4,000万ドルと予想しています。

経営陣は、エクスペリエンス・サービス部門が2026年第4四半期および通期の双方で、利益率の拡大とともに売上高および調整後EBITDAの2桁成長を達成すると見込んでいます。ブランド・サービス部門は第4四半期に前四半期比で改善し、2027年には売上高と利益率の安定化に向かう見通しです。リテーラー・サービス部門の通期売上高および調整前EBITDAは、第4四半期の前年同期ハードルが高いことなどが一因となり、ほぼ横ばいとなる見込みです。

リスクと今後の注視事項

• ブランド・サービス部門は引き続き、顧客離脱、内製化、地域競合、および利益率の高い業務からの不利なシフトに直面しています。
• 経営陣によると、エネルギー価格と金利の上昇により、個人消費を取り巻く不確実性が高まっています。
• 小売関連プロジェクトの時期や、プロジェクト獲得に応じた適時な人員配置の可否により、四半期をまたいで売上計上期がズレる可能性があります。
• 足元の賃金、採用、人員確保への投資がエクスペリエンス・サービス部門の利益率を圧迫しています。
• 構造改革およびWorkday関連の現金支出は報告ベースのキャッシュ・フローに影響を与えますが、経営陣は構造改革費用の減少と設備投資の抑制が2027年のフリー・キャッシュ・フロー拡大を支えると見込んでいます。
• ネットレバレッジ比率は約4.6倍と高水準が続いており、同社は現金およびフリー・キャッシュ・フローを主に負債削減に充てる計画です。

アナリスト質疑応答の要点

経営陣は、より健全なブランド・サービス事業への脱却には、地域ごとの責任体制強化、大口顧客（ナショナルアカウント）支援の改善、店頭マーチャンダイジングの成長、サプライチェーン・アズ・ア・サービスの継続的拡大が必要であると述べました。同社は2027年から安定化が始まると予想しています。

発表されたコスト削減目標は、クライアント増員や優秀な経営陣人材の採用など、計画された再投資を控除した純額です。したがって経営陣は、それらの投資を考慮した上でコスト基盤が改善すると期待しています。

フリー・キャッシュ・フローについて、経営陣は設備投資の減少と構造改革費用の縮小が2027年の改善を後押しすると見ています。運転資本の規律維持も引き続き最優先事項であり、第3四半期の売掛債権回転日数（DSO）は60日でしたが、年末までに約55日に向かう軌道を維持しています。

経営陣は、第4四半期の業績結果には複数の流動的要素があると述べています。これには、ブランド・サービス部門の構造改革の進捗ペース、堅調ながら投資を伴うエクスペリエンス・サービス部門の成長、リテーラー・サービス部門のプロジェクト時期および前年同期比較の厳しさなどが含まれます。

決算説明会 文字起こし全文

決算説明会の完全なトランスクリプト

経営陣による説明

Operator

Ladies and gentlemen, thank you for joining us, and welcome to the Advantage Solutions Third Quarter 2026 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded.

I will now hand the conference over to the Advantage Solutions team.

Unknown Executive

Welcome to Advantage Solutions Third Quarter Earnings Conference Call. Dave Peacock, Chief Executive Officer; and Chris Growe, Chief Financial Officer, are on the call today. Dave and Chris will provide their prepared remarks, after which we will open the call for a question-and-answer session.

During this call, management may make forward-looking statements within the meaning of the federal securities laws. Actual outcomes and results could differ materially due to several factors, including those described more fully in the company's annual report on Form 10-K filed with the SEC. All forward-looking statements are qualified in their entirety by such factors.

Our remarks today include certain non-GAAP financial measures, which are reconciled to the most comparable GAAP measure in our earnings release. As a reminder, unless otherwise stated, the financial results discussed today will be from continuing operations and revenues will exclude reimbursable expenses.

And now I would like to turn the call over to Chief Executive Officer, Dave Peacock.

David Peacock

Thanks, operator. Good morning, and thank you for joining us. I want to begin by thanking our teammates for their hard work over the past several years. Our people continue to adapt to a challenging environment, serve our clients and customers with dedication and drive strong execution. I'm grateful for their commitment. As a services business, our people are the engine that drives our company.

On a pro forma basis, excluding divestitures, third quarter net revenues of $782 million increased 1% year-over-year, representing our fourth consecutive quarter of growth. Adjusted EBITDA was $85 million, down 12%, reflecting continued planned investment in the business and ongoing headwinds in Branded Services.

Our third quarter included some encouraging developments in a dynamic market. Experiential Services delivered another strong quarter with revenue up over 11%, driven by strong execution and global growth. And Retailer Services returned to both revenue and adjusted EBITDA growth. While this was partially offset by a soft performance across Branded Services, we continue to see solid growth in our retail merchandising and supply chain businesses within this segment. Overall, our year-to-date performance is largely in line with the outlook we gave at the beginning of the year, with revenue up 3% and adjusted EBITDA down 3%.

Our segment results reflect a continuation of the trends we have seen so far this year, including a particularly strong performance in our labor-related businesses. Experiential Services delivered another strong quarter. Demand signals remain exceptionally healthy. We continue to see opportunities to expand event volumes, and our team sustained high levels of execution with over 13% growth in events per day.

Adjusted EBITDA growth was modest against a tough comparison and given our decision to invest in wages, recruiting and staffing to meet anticipated demand and sustain superior service levels. We expect this margin pressure to be temporary and believe these investments are critical to capturing the significant long-term opportunity in this segment. On that point, pricing actions began to take effect during the quarter and should increasingly offset our labor investments. Looking forward, we expect double-digit revenue and adjusted EBITDA growth along with margin expansion in both the fourth quarter and the full year.

Retailer Services delivered continued revenue growth given strong project demand. Our Daymon private brand business also outperformed expectations as our team helps retailers meet the trend toward value and strong private brand portfolios. Our merchandising teams executed well with in-stock performance progressing well along with other key operating measures. In addition, we continue to make progress pursuing non-grocery customers.

Results benefited from a small tariff refund in the quarter, but underlying trends were strong. Our priorities remain unchanged. Staffing alignment and consistency, superior execution and better operating discipline are all areas of focus as we invest in our capabilities.

In Branded Services, performance has not met our expectations, and we are taking action to change the trajectory of this business. While we are seeing strong growth in our business from our top clients, we continue to feel the effects of client losses and some ongoing pullback in smaller clients due to regional competition and in-sourcing. However, our project work in branded retail was a bright spot and grew during the quarter. We're optimistic about an improving project pipeline in this business.

In addition, we are seeing accelerating growth in our Supply Chain as a Service business, and we are optimistic about its prospects. CPG brands continue to cite growing complexity in the route their products take to market, and our offering is well positioned to help address that complexity. We have assembled a network of more than 100 omnichannel fulfillment centers and multiple freight partnerships that supports clients across business-to-business, direct-to-consumer and e-commerce channels and can provide end-to-end logistics services, including last-mile delivery.

This business continues to gain traction. With one client we recently onboarded, we are able to reduce retail chargebacks by 83% and time in transit by 32%. This business is on track to grow meaningfully in 2026, and we expect to continue growth in 2027. Looking ahead, we expect the Branded Services performance to improve sequentially in the fourth quarter, and we still expect the segment to move towards stabilization in 2027.

To better service our customers long term, today, we are announcing a new restructuring plan. Our technology and AI investments have given us better tools to deliver on customer expectations, simplify our organizational structure and operate more effectively and efficiently. While these changes are improving our service levels, they have also enabled us to streamline our cost structure to match the shape and trajectory of our business.

Our traditionally lower-margin labor services continue to show durable demand and growth as packaged goods producers and retailers find increasing value in our team's ability to both enable growth at retail and activate shoppers. Conversely, some of our formerly higher-margin network businesses where we serve as an intermediary between parties for sales or marketing services are seeing persistent cyclical declines. This mix shift is a result of a long-term change in demand and as such, the cost structure and processes that supported our historical mix are no longer properly aligned with the businesses we have today. As a result, we are undertaking a restructuring of the organization, which is a critical second phase of transformation of our business.

Leveraging previous investments, we are evolving our organization to better align with customer needs and improve our service levels. We have identified and begun implementing restructuring actions designed to reduce layers and bureaucracy and bring our cost structure in line with current business opportunities. The resulting structure is being set in motion in the fourth quarter, will continue into 2027 and is estimated to yield approximately $25 million of annualized savings, net of investment, with plans for over $5 million in additional net savings over time.

Importantly, the 2 layers of our organization closest to clients and customers are not affected by these actions, and we do not expect any disruption to how we serve them. In fact, we are growing our employee head count and enhancing our talent levels throughout 2026 across client-facing roles.

As an organization, we have been focused on transformation to improve our client service and employee experience, especially with our IT investments and AI use cases. As we move toward the end of our IT platform overhaul, we have remained disciplined in consistently evaluating the long-term return on each investment.

Every investment should accomplish 1 of 2 objectives. It should either enhance the level of service we can provide our customers or improve the experience our teammates have working at Advantage. Chris will discuss more about our specific technology platforms. Our current restructuring will create a more efficient organization that delivers better client service, reduces friction for our teammates and more effectively converts revenue growth into margin expansion, earnings growth and cash generation.

Our top 25 clients are collectively showing strong growth. However, we have opportunities to better support brands in local markets or regions. Our new structure addresses this by transitioning to 4 regions and implementing P&L ownership for our regional leaders. We are doing this while bolstering our teams serving larger national accounts, making us the only agency with both a strong national and regional footprint and the only true national sales and execution agency for fresh brands at retail. Fresh categories are growing, and we're positioned to capitalize on this with our tenured and talented team.

Turning to the macro environment. Our business is increasingly concentrated around leading food retailers that continue to grow and take market share. Our labor and execution services support growth for these best-in-class retailers, providing resilience in our revenue outlook. As we have done in the past, we conducted surveys of our customers in the third quarter to assess the operating environment. We leverage this critical data to help both our manufacturing clients and retail customers grow and take market share.

While affordability continues to dominate the narrative in the industry, our surveys show that the shopping experience is becoming a critical differentiator at retail. Ease of shopping ranks first as a determining factor of retailer choice, ahead of price and promotions. This supports our shelf space planning and reset business as retailers look to dynamically assort their shelves to reduce out of stocks and make the shopping experience easier.

Understanding the mission behind a shopper's trip and delivering the experience they expect is critical to becoming a retailer or brand of choice. Our Experiential Services, which range from sampling to assisted selling to brand activation, enable us to help retailers capitalize on this trend as shoppers look to discover new products when they shop in brick-and-mortar stores. The key takeaway from these surveys is that retailers and manufacturers are working to serve these discerning shoppers and are focusing more on the shopping experience than ever before and Advantage is there to serve them in this journey.

Consumers also continue to be value-seeking, and our Daymon private brand business leads representation of contract manufacturers in this segment of the market. We partner closely with retailers to help them tailor their private brand programs and can bring scale and speed to innovation with more than 35,000 global contract manufacturing relationships.

Turning to our outlook. We are reiterating our full year revenue and adjusted EBITDA guidance. The business is broadly performing in line with our prior expectations, but uncertainty has increased from the impact of rising energy prices and interest rates on consumer spending. We believe our diversified portfolio allows us to successfully navigate this challenging environment.

In conclusion, we are encouraged by trends in Experiential Services and Retailer Services, and we understand the work required in Branded Services to improve our service levels and performance. We believe the actions underway will create a more agile and more durable Advantage.

I will now turn it over to Chris for more detail on our financial performance.

Christopher Growe

Thank you, Dave, and welcome to everyone joining us today. I will review our third quarter performance by segment, discuss our cash flow and capital structure and provide additional detail on our outlook. Unless otherwise noted, the year-over-year comparisons I will discuss are on a pro forma basis, excluding divestitures.

In the third quarter, businesses we have divested represented a year-over-year headwind of approximately $5 million to revenues and approximately $3 million to adjusted EBITDA. And for 2026, we still expect divestitures to represent a year-over-year headwind of approximately $20 million to revenues and over $10 million to adjusted EBITDA.

Starting with Experiential Services, we generated $306 million of revenue and $35 million of adjusted EBITDA, up 12% and 0.3% year-over-year, respectively. Results reflect continued strong demand, higher event volumes and solid execution. Profit growth was dampened due to a tough comparison and our proactive decision to invest in wages, recruiting and staffing to support higher demand and sustained execution. Pricing actions began to take effect during the quarter and should provide increasing margin support as we move forward. Looking ahead, we expect double-digit revenue and adjusted EBITDA growth and margin expansion for both the fourth quarter and the full year.

Turning to Branded Services, we generated $225 million of revenue and $18 million of adjusted EBITDA, down 11% and 55% year-over-year, respectively. Performance remained under pressure from client losses and unfavorable business mix. Declines in higher-margin headquarter sales and agencies were partially offset by strong growth in supply chain revenue. Encouragingly, new business wins improved during the quarter and project work in branded retail grew. As Dave discussed, we are taking meaningful action to align the cost structure with the current revenue base and mix, and we expect sequential margin improvement in the fourth quarter with a more meaningful path toward revenue and margin stabilization in 2027.

Finally, for our Retailer Services segment, we generated $251 million of revenue and $32 million of adjusted EBITDA, up 1% and 43% year-over-year, respectively. Results included a small benefit from tariff refunds related to goods we source for retail clients. Excluding the benefit of tariff refunds, adjusted EBITDA would have been up over 30%. Performance was supported by growth in SAS, including pricing, project activity and new business wins as well as solid results at our Daymon private label business. Staffing remains an important focus as we align labor with customer demand and become more agile in reacting to changes in the market. Looking forward, we note that we are going up against a more difficult comparison in the fourth quarter. Despite quarter-to-quarter volatility, we currently estimate roughly flat revenue and adjusted EBITDA growth for the year in this segment.

Our shared service costs were up modestly year-over-year in the third quarter, reversing some of the favorability we experienced during the first half, but those costs remain down year-to-date compared to last year. We have seen lower medical costs than anticipated this year after 2 years of increases well ahead of expectations, which is encouraging. At the same time, we continue to manage costs closely across the shared services and are taking advantage of AI and automation opportunities.

As part of our restructuring activity, we are also taking targeted action to reduce redundant shared service costs and other costs not providing the value originally anticipated. We are also being more discerning about IT projects, which should help lower our costs as well as support lower CapEx in the future.

Turning to Workday, as the project progressed, the cost of the rollout anticipated financial and operational benefits no longer delivered an adequate return. As Dave mentioned, every investment should either enhance the level of service we provide or improve the teammate experience. Starting the project revealed several opportunities to streamline boundary systems, improve processes and leverage new AI technology to enhance workflows without the cost and transition risk of a large system implementation. We have paused the Workday implementation while we reevaluate its scope, design and timing against current business needs.

In the interim, we will continue to operate on our existing human capital platform, pursue targeted upgrades and leverage AI to deliver comparable functionality at a lower cost with reduced transition risk. This approach also creates capacity to streamline, improve and reduce duplication across our other technology systems.

Importantly, this decision reduces our 2026 capital spending expectations, supporting our updated CapEx range of $40 million to $45 million. And this should result in lower future capital and operating costs relative to completing the implementation. We currently expect capital expenditures in 2027 to be in a range of $35 million to $40 million, and we will provide an update in early 2027 once we solidify our spending plans for the year.

Moving beyond Workday, we are beginning the second phase of our transformation, focused on simplifying the organization and resetting the cost structure. As Dave mentioned, the program represents approximately $25 million of annualized cost savings starting in the fourth quarter with plans for at least $5 million in additional savings over time. We continue to assess the opportunity for expanding those savings by addressing spending programs, IT projects and other areas.

The majority of the near-term actions associated with the restructuring will occur in the fourth quarter with the broader restructuring extending into 2027. Most of the operating cost actions are weighted to Branded Services and select support functions. The program extends beyond role reductions to include organizational delayering, consolidation of support structures, reductions in vendor and third-party spend, real estate optimization and lower discretionary costs. We are implementing these actions thoughtfully, recognizing the impact on colleagues while protecting and investing in the 2 layers of resources closest to our clients.

We expect to incur restructuring and reorganization costs related to this work starting in the fourth quarter. We estimate those costs will total $7 million to $10 million, with the majority incurred in the fourth quarter and some extending into 2027. We'll provide more detail as we progress with our plans. The financial objective of the restructuring is to align costs with the current revenue base and business mix and improve incremental margins on future growth.

We remain laser-focused on improving cash generation and managing working capital. DSOs were right at 60 days in the quarter, down from the second quarter, and we remain on a path to approximately 55 days by year-end. We continue to focus on collections and disciplined cash management to achieve this outlook. This diligent focus on working capital management helped support strong adjusted unlevered free cash flow in the quarter, which reached $99 million and a conversion rate of 116%.

Cash generation remains a core strength of the business, supported by disciplined cost and working capital management. Restructuring and Workday-related cash costs will affect reported cash flow, but they should be distinguished from the underlying operating cash generation of the business.

Moving to the balance sheet and capital allocation. We ended the quarter with approximately $131 million of cash on our balance sheet. Net leverage ended the quarter at approximately 4.6x. Our priorities remain maintaining appropriate liquidity and reducing debt. We do not anticipate share repurchases beyond activity intended to offset dilution, and both cash and free cash flow will continue to be directed primarily toward debt reduction.

Finally, turning to our outlook. We are reiterating our full year revenue and adjusted EBITDA guidance. We continue to expect revenue growth of flat to up low-single digits with adjusted EBITDA flat to down mid-single digits versus the prior year. We are also reiterating our adjusted unlevered free cash flow guidance of $250 million to $275 million and net free cash flow at 25% of EBITDA before related debt financing costs. We also expect lower interest expense and CapEx as noted. Key factors influencing our outlook include continued strength in experiential demand and execution, retail project timing and second-half project ramps and the pace of restructuring in Branded Services.

As Dave noted, uncertainty in the market has increased, and our guidance allows for a relatively wide range of outcomes in the fourth quarter. As we enter 2027, our focus is on completing the second phase of our transformation, realizing the associated savings and positioning the business for better earnings flow-through as revenue grows.

Thank you for your time. I will now turn it back over to Dave.

David Peacock

Thanks, Chris. The third quarter reinforced the strength of our growth initiatives and the benefits of our diversified offerings while also solidifying where we need to sharpen our focus and improve our execution. The restructuring we announced reflects our approach of always investing to improve our client service where returns are also compelling.

We will execute these actions thoughtfully in an effort to improve how we serve our customers and reduce friction for our teammates. We believe this work will position Advantage as the best service provider to consumer retail while converting growth into stronger margins and cash flow generation over time.

I want to thank everyone for joining us today. Operator, we are now ready for questions.

Operator

[Operator Instructions] Your first question comes from the line of Luke Morison with Canaccord Genuity.

質疑応答

Lucas Morison

So Dave, the restructuring obviously weighted towards Branded. I think you mentioned in the deck, new business wins improved during the quarter. Just help me think about like what does a healthier Branded business look like in the coming quarters and years as these actions flow through and are in place, both from a growth and margin -- sustainable margin perspective?

David Peacock

Yes. Thanks, Luke. I think a couple of things are important. We said in our prepared remarks, but our restructuring was first designed to improve the service level to our clients. It came with savings because one of the things that we have seen and experienced is we just had too many layers and frankly, bureaucracy was getting in our way to serving clients effectively. So we didn't touch the first 2 layers that touch customers and clients. We've actually invested in growth in client-facing roles, but we eliminated some management roles. That's going to come with savings. So there was -- there were reductions, but also reinvestment in the plan.

I think it's going to put us in a much better spot as a business overall because we now have dedicated focus with really strong leadership on national accounts, kind of large mass and grocery club retailers. And then you've got also our regional focus where we've got 4 regions now with general managers that have full P&L ownership and ownership of the functions from business development to sales execution to client service level. So in the past, we've had some of those functions centralized, and we've put some of that back into the regions so they can be more nimble and more accountable for the results.

When you look at Branded Services overall, we do see some green shoots. We talked about Supply Chain as a Service, which tends to be a lower-margin business, but highly in demand. As we listen to a lot of our clients and if you're listening to any of the CPG earnings calls, there's a lot of discussion around challenges in supply chain, and we can help our clients with that, especially because we have an understanding of the shelf dynamics as well and what's actually needed in store.

And then we're very optimistic about our retail merchandising business. This is a business that -- where we basically go out to stores and either improve the execution or even sell in incremental merchandising of products on behalf of our CPG clients. This helps the retailers who are seeing more challenges in getting labor in store. But this is a business that operates at a slightly higher margin than the overall average of the Branded Services segment, and it's where more and more of our pipeline and growth is coming from as it relates to new business opportunities.

So I think you start seeing stabilization as you get to '27. And then I think this retail merchandising business and I'd say, an improving regional, especially headquarter selling business gets this business back on track.

Lucas Morison

Super helpful. And then maybe, Chris, one for you. The Workday implementation has been paused, but now you have this phase 2 program running into 2027. Just how should we be thinking about the path to stronger free cash flow conversion from EBITDA as that transformation work matures from here?

Christopher Growe

Yes. They're obviously related in a way, let me say it that way, Luke, but I would just say that maybe taking each of the pieces here, when I think about Workday, for right now, it's paused. We're going to work through that program. That manifests itself and as we said, I think, in my prepared remarks, in less CapEx in the short term.

There is a charge we'll take this quarter as well. I still think that our charges -- kind of restructuring charges for the year will be around what we had said before, around that $35 million level, maybe a little bit above that. I think you're going to see about $7 million to $10 million related to restructuring actions overall to achieve this $30 million plus in savings. So given what we've realized to date in charges, given what we expect from the new program, it still puts us, I think, in line with what we had said to you before.

Do some actions kind of linger into next year? Certainly, that's possible. But I still think we're going to have a lower level of restructuring charges next year and the outcome of that would be better cash flow. At the same time, we talked about CapEx, and CapEx is a little lower this year, and we indicated that in that kind of $35-plus million level next year. So it's going to be down as well in 2027. That, too, will help cash flow. So I think there's still some -- even though we've got some changes going on here, if I could say it that way, I think you're still going to see the kind of support there for stronger free cash flow growth in 2027.

Operator

Your next question comes from the line of Greg Parrish with Morgan Stanley.

Gregory Parrish

Congrats on the results. Just thinking about fourth quarter here, I mean, how should we think about the cadence relative to the results you just put up, revenue up 1%, EBITDA down 12% organically on year-over-year? Like how do we roll that forward to fourth quarter? Your guidance range sort of allows for a lot of flexibility?

Christopher Growe

It does, and it was deliberate, as you can imagine, we thought a lot about that. Just there's a number of moving parts that caused us to want to keep that a little bit wider range going into the fourth quarter. I think the wider range allows for varying outcomes, and we're in the middle of restructuring our Branded Services business. We did indicate that would get better in the fourth quarter. We also indicated that you'd see double-digit revenue and EBITDA growth in Experiential, and we said there would be margin expansion there. We also indicated that Retailer was going to be a little more challenged in the fourth quarter, just we've seen some volatility quarter-to-quarter in the project work, and we have a tough comp to the prior year. So we've given some of the elements, if you will, Greg, I think we would kind of leave it at that from that standpoint to give your indication there for the fourth quarter.

David Peacock

Yes. Greg, let me build on what Chris said. One thing to think about is, especially when he talks about Retailer, but it applies to some other spots in the business, it gets down to being awarded projects and then staffing and having that timing aligned. So sometimes your projects will span December through February or December through March. And so to the degree you can get staff up and running, you can realize some of that earlier or some of that may bleed into the following year and because a lot of retailers especially have different fiscal years than the calendar fiscal. So that's driving some of this as well.

Gregory Parrish

Yes. Okay. I appreciate the color that you were able to give. So on this cost savings program, it seems that the savings are all operating, it seems like. And then I mean, will any of these savings be reinvested? Or do you expect most, if not all, to sort of flow through to the bottom line?

David Peacock

The savings that we report in both $25 million and greater than $5 million going in the future are net. So as it relates to how those are in the P&L, if you will, there are reinvestments that were already contemplated. They obviously don't include kind of onetime costs, but they were net because we did make some reinvestments in frontline roles and client-facing roles and just even in caliber of talent that -- in a handful of leadership roles.

Gregory Parrish

Okay. That's helpful color. And then maybe just one last one for me. So this tariff refund, I mean, I think you can kind of back into it based on the color you gave. I don't remember seeing this before. I mean, is this the first quarter that you've seen this flow through? And is this -- is there any expected future flow-through of this? Or is this onetime?

Christopher Growe

Yes. I would just say that you've seen like every CPG company has had this as well. We have a smaller business within our Retailer Services segment that does, for -- I'll call it, for a short period of time, will hold inventory, but it purchases product for some retailers. And that business, therefore, experienced a negative effect of the tariffs last year. And then this year gets the -- obviously, the benefit from that. There's been some refunds coming through as a result of the changes in those programs. So that did come through. Yes, you can do the math on that, and it was not a huge contributor, but it did contribute to our profit in the third quarter.

Gregory Parrish

Okay. So maybe a little bit more modest impact in fourth quarter and then limited next year.

Christopher Growe

Yes. Sorry, Greg, you asked about going forward. I would not expect much going forward. I think most of that's already been realized. So I think we're there for -- again, I would think we're always trying to look for more, of course, but I think there's -- most of our refunds that we've applied for have all been returned already, and they're here in the third quarter.

Operator

There are no further questions at this time. I will now turn the call back to David Peacock for closing remarks.

David Peacock

We want to thank everybody for joining, and we look forward to connecting with this group next quarter. Thank you.

Operator

This concludes today's teleconference. You may now disconnect your lines at this time. Thank you for participating.