EHS Investments Calls for Reform at TrueBlue to Enhance Shareholder Value

EHS Investments Advocates for Change at TrueBlue

In a recent public letter and presentation, EHS Investments, holding 2.4% of TrueBlue's outstanding shares, expressed serious concerns about the company's persistent underperformance and governance deficiencies. The critical message conveyed aims not just to highlight the issues but to initiate a constructive dialogue focusing on realistic solutions to revitalize TrueBlue's operations and financial health.

Current Performance Concerns

EHS's letter highlights alarming statistics regarding TrueBlue's shareholder returns, which have plummeted by as much as 74% over the last decade. This stark reality underscores a substantial gap when compared to industry peers and the Russell 2000 index. EHS underscores that the inefficiencies in capital allocation have significantly impacted TrueBlue's value, with nearly $490 million spent on acquisitions since 2013, most of which have resulted in losses, eroding the company's EBITDA from $72 million to just $11 million in 2024.

Worryingly, the letter points to a reckless share buyback program, where TrueBlue bought shares at inflated prices without any repurchases in 2025 when prices dropped dramatically. EHS emphasizes that such lack of foresight and strategic missteps necessitate urgent conversations about the future direction of the company.

Operational and Strategic Failings

EHS highlights that TrueBlue has lost market share in the light industrial staffing sector—a decrease from about 7% to 5% between 2019 and 2024. This decline is troubling, especially as the overall industry faces cyclical downturns where other competitors seem to manage better. The underperformance is further accentuated by continued operational failures and a disconnected leadership team that operates remotely, away from pivotal markets.

The letter urges TrueBlue's Board of Directors to hold itself accountable amidst growing shareholder dissent. In the recent 2025 annual meeting, votes against the Board nominees rose alarmingly, indicating an increasing recognition of governance failures among investors.

A Call for Action

EHS proposes a comprehensive turnaround plan aimed at rejuvenating TrueBlue’s performance. The recommended strategies include:
1. Moratorium on M&A Activities: Immediately halt further acquisitions and possibly divest non-core assets such as Healthcare Staffing Professionals.
2. Revitalize Sales Strategies: Shift focus back onto small and medium-sized businesses which align more closely with TrueBlue’s historical strengths.
3. Enhance Branch Network: Revitalize and possibly expand the branch network rather than consolidating them, thereby strengthening local relationships and competitive positioning.
4. Embrace Franchising: Consider a franchising approach to enhance flexibility, performance, and generate funds for reinvestment.
5. Geographical Realignment: Adjust geographical focus towards regions benefiting from favorable demographics and regulatory environments, pinpointing Texas and Arizona as growth opportunities.
6. Balance Sheet Efficiency and Digital ROI: Improve efficiency and rationalize expenditures in both physical and digital domains while enhancing shareholder returns.
7. Cost Management Restructures: Enact deep cost restructuring measures to optimize profitability and restructure for market recovery.

Looking to the Future

Despite its setbacks, EHS maintains that TrueBlue’s intrinsic value has the potential to be deeply unlocked through effective strategic execution and overhaul of company governance. The turnaround outlined by EHS paints a hopeful picture where TrueBlue might yet reclaim its market standing, especially during projected recovery phases in the staffing industry.

In closing, the letter signals the need for collaboration between EHS, TrueBlue's management, and Board to mobilize a comprehensive strategy that ultimately serves shareholder interests while enabling operational revitalization. EHS advocates working together with the current leadership but warns of possible strategic alternatives if progress is not forthcoming over the next year.

With decisive action and a commitment to a strategic overhaul, there remains significant upside potential for TrueBlue, marking this moment as critical for shareholders and the future direction the company will take.