Advertising giant WPP PLC has revised its full-year guidance for the second time in a row due to lower net sales in the third quarter. While the company experienced growth in the U.K., Western Continental Europe, and the rest of the world, this was offset by declines in North America.
WPP, based in London and owning agencies such as Ogilvy and media-buying giant GroupM, now projects like-for-like growth in net sales for 2023 to be between 0.5% and 1.0%. This is a significant decrease from the previous guidance of 1.5% to 3%, which was already cut back in August from 3% to 5% growth.
The company anticipates a headline operating margin of approximately 14.8% to 15.0% for the full year. Initially, the guidance was set at 15.0%.
Chief Executive Mark Read expressed disappointment with the company’s top-line performance in the third quarter, attributing it to cautious spending trends observed in the second quarter. These trends have been particularly evident in technology clients, with GroupM experiencing a greater impact over the summer than in the first half of the year.
In terms of revenue less pass-through costs, also known as net sales, WPP reported £2.84 billion ($3.44 billion) for the quarter, a 0.6% decline on a like-for-like basis compared to £2.99 billion in the same period last year.
By region, North America saw a decline of 4.1%, while both the U.K. and Western Continental Europe witnessed a sales increase of 1.1%. The rest of the world also experienced growth with a sales rise of 2.8%.
WPP shared that it secured $1.4 billion of net new business in the quarter, bringing the year-to-date total to $3.4 billion.
Overall, while WPP faces challenges in certain regions and sectors, the company remains focused on adapting to market conditions to achieve sustainable growth.
