WPP slashes forecast as client spending sharply drops

WPP slashed its full-year forecast on Wednesday, citing a sharp drop in client spending amid a challenging economic environment and weaker-than-expected new business wins.

The world's largest advertising group now expects a key sales metric, like-for-like revenue less pass-through costs, to fall between 3% and 5% for 2025, a significant downgrade from its previous guidance of flat to a 2% decline.

WPP also cut its headline operating profit margin forecast, now expecting a year-on-year decline of between 0.50 and 1.75 percentage points, compared with a prior forecast of around flat.

The warning comes after the company said performance deteriorated through the second quarter, with an expected first-half revenue decline of between 4.2% and 4.5%.

"While we expected the second quarter to be similar to the first quarter, performance in June was worse than anticipated and we expect this pattern of trading in the first half to continue into the second half," Chief Executive Officer Mark Read said in a statement.

The company pointed to a slowdown in North America and weakness in its Global Integrated Agencies segment, which includes its media and creative businesses.

The downgrade marks a sharp reversal from April, when WPP had reiterated its earlier, more optimistic forecast for the year.

WPP said it has taken severance actions at its media arm, which are expected to generate over 150 million British Pounds in annualized gross cost savings.

The company now anticipates first-half headline operating profit to be between 400 million and 425 million British Pounds.