Following the advertising giant’s second earnings warning of the year, which stated that clients were spending less and that it was bringing in fewer new clients than anticipated, WPP shares fell on Wednesday.
Following a second quarter in which sales fell as high as 6%, WPP now projects comparable revenue to decrease 3% to 5% for the year, compared to February’s prediction that it would be flat to down 2%. According to WPP, its operating margin for the first half of the year will decline by 2.8 to 3.3 percentage points.
The company said in a statement, “We have seen a deterioration in performance as [the second quarter] has progressed against a challenging economic backdrop.”
Generative artificial intelligence, which is also a problem for the advertising sector, was not mentioned by WPP in the update.
WPP’s stock (UK:WPP) dropped as much as 17%, reaching its lowest point since the end of the global financial crisis in 2009.
Publicis (FR:PUB) and Havas (NL:HAVAS) both had a 2% decline in share price. In early premarket action, Omnicom (OMC) and Interpublic (IPG) both saw declines of roughly 3%.
According to FactSet data, despite having its headquarters in the United Kingdom, WPP’s top market by revenue is the United States, accounting for 35% of revenues.
