WPP Slashes 2025 Forecast, Stock Drops 15.8% Amid CEO Transition

WPP Plc., the London-based advertising giant, has announced a downward revision of its 2025 performance forecast, intensifying its challenges in finding a new chief executive officer. The company's full-year net income, excluding pass-through costs, is now expected to decrease by 3% to 5% year-over-year, widening from the previously anticipated maximum decline of 2%. Additionally, the operating profit margin is projected to decrease by up to 175 basis points compared to the previous year, contrasting with the earlier expectation of remaining stable.

Current CEO Mark Read acknowledged in a statement that the company's performance in June fell short of expectations, and the sluggish transaction trends observed in the first half of the year may persist into the second half. This performance warning is particularly challenging for WPP, which is currently in a management transition period. Read is set to retire at the end of the year, and the company is actively seeking a successor. Over the past few years, the British firm, which has long held the top position in the global advertising industry, has been continuously restructuring its business and optimizing costs. The company has also announced plans to invest billions of pounds in technological upgrades, with a focus on advanced fields such as artificial intelligence to revitalize growth.

Notably, WPP has recently lost several key client contracts, including a $1.7 billion global creative business deal with Mars Inc., the parent company of M&Ms and Snickers, which was ultimately secured by France's Publicis Groupe. Despite these losses, WPP maintained its full-year performance guidance in its April earnings report. At that time, Read stated that there were no observed changes in client spending plans due to tariff policy adjustments, but he also warned of a "slow start" in the Western European market, particularly in Germany.

This news has sparked a significant reaction in the capital markets. As of the time of publication, WPP's U.S. stock price had fallen by approximately 15.8% in pre-market trading, closing at $30.15. This reflects investors' ongoing concerns about the cyclical weakness in the advertising industry and the company's transformation efforts.

WPP's recent challenges highlight the broader issues facing the advertising industry, including the impact of economic uncertainties and the need for continuous innovation. The loss of key clients like Mars Inc. underscores the competitive nature of the industry and the importance of maintaining strong client relationships. As WPP navigates through this transitional period, the company's ability to adapt and innovate will be crucial in regaining its footing and securing its position as a leader in the global advertising market.