WPP Plunges 16%, Leads FTSE 100 Lower On Profit Warning

Published: Wednesday, July 9, 2025 at 8:30 am

WPP Shares Plunge Following Profit Warning, Dragging Down FTSE 100

Shares in advertising and marketing giant WPP experienced a significant downturn on Wednesday, leading the FTSE 100 lower. The decline was triggered by a profit warning, as the company revised its sales and margin forecasts for 2025 due to a challenging first-half trading period.

WPP's stock price fell sharply, reflecting investor concerns about the company's performance. The company anticipates a drop in like-for-like revenues, excluding pass-through costs, of between 4.2% and 4.5% during the first half of the year. This downturn is attributed to a deteriorating economic environment, with performance weakening as the second quarter progressed.

The company's second-quarter corresponding revenues are now expected to decline between 5.5% and 6%, a revision from previous expectations. North America, which accounts for approximately 38% of WPP's total sales, saw a deterioration in conditions between the first and second quarters, leading to a projected low single-digit decrease in like-for-like revenues, excluding pass-through costs, for the first half. Other regions also showed weakness despite some easing of comparative figures.

WPP also faces pressure from restructuring costs at WPP Media. As a result, the company now projects a half-year operating profit ranging between 400 million and 425 million. Operating profit margins, excluding currency fluctuations, are expected to fall between 280 and 330 basis points year-on-year, resulting in a range of 8% to 8.5%.

CEO Mark Read cited a challenging trading environment, intensified macro pressures, and lower net new business as contributing factors. The company anticipates the pattern of trading in the first half to continue into the second half. Consequently, like-for-like revenues, excluding pass-through costs, are projected to fall between 3% and 5% for the full year. Operating profit margins are also expected to decline between 50 and 175 basis points, excluding foreign exchange volatility.

Analysts have described WPP's start to 2025 as poor, with concerns about the second half. The drying up of the new business pipeline and restructuring efforts are also weighing on the company's performance. Mark Read is set to retire as CEO at the end of the year.

BNN's Perspective:

The situation at WPP highlights the vulnerability of the advertising and marketing sector to broader economic headwinds. While the challenges are significant, the company's global reach and established client base provide a foundation for potential recovery. The incoming CEO will face a critical task in navigating these difficulties and revitalizing the company's growth trajectory.

Keywords: WPP, FTSE 100, profit warning, advertising, marketing, revenue, operating profit, Mark Read, shares, financial performance, economic downturn, restructuring, North America, CEO, business

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