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Investing.com -- Shares of WPP PLC (LON:WPP) tumbled 13% on Thursday after the advertising giant slashed its full-year growth outlook and reported disappointing third-quarter results.
The company now expects like-for-like revenue less pass-through costs to decline between 5.5% and 6.0% for 2025, worse than its previous forecast of a 3% to 5% drop.
WPP reported third-quarter revenue of £3.26 billion, down 8.4% year-over-year on a reported basis and 3.5% on a like-for-like basis. Revenue less pass-through costs fell 11.1% to £2.46 billion, representing a 5.9% like-for-like decline. The company cited a significant deterioration in its WPP Media business compared to the second quarter.
"My ambition is for WPP to lead our industry in terms of innovation, client delivery and organic growth. However, I acknowledge that our recent performance is unacceptable and we are taking action to address this," said Cindy Rose, Chief Executive Officer of WPP, who assumed the role on September 1.
The company’s performance was particularly weak in key markets, with the UK down 8.9%, North America falling 6.0%, and China declining 10.6% on a like-for-like basis. Only India showed growth among major markets, rising 6.7%.
By business segment, Global Integrated Agencies saw revenue less pass-through costs decline 6.2%, Public Relations fell 5.9%, and Specialist Agencies dropped 2.2%. The company’s Healthcare & Pharma sector was the only bright spot, growing 6.7% in the quarter.
Rose outlined a strategic review focused on simplifying the company’s offerings, improving execution, expanding into enterprise and technology solutions, and strengthening financial foundations. "There is a lot to do, and it will take time to see the impact, but in my first 60 days we are already moving at pace," she added.
WPP maintained its guidance for adjusted operating cash flow before working capital at £1.1 billion to £1.2 billion, while forecasting a headline operating profit margin of around 13% for the full year.