WPP: "Will the bleeding ever end?"

[ad_1]

There’s no way to dress it up: marketing services holding company WPP’s Q3 earnings – and its first under new CEO Cindy Rose – were awful.

Organic overall numbers were down 5.9% year over year, exactly the same as the PR segment of WPP’s business, which now largely comprises the Corey duBrowa-led Burson.

Rose issued another profit warning and called the earnings performance “unacceptable.” A comprehensive strategic review of the group is underway and a “deep and bold restructuring” is in the works.

WPP’s shares tumbled over 21% in the past three days and they are down by more than 60% in 2025. The holdco was particularly hit by client losses in the media, data and AI spaces. Rose promised a much simpler business and a hard push into technology to turn things around.

At Burson, the near 6% organic growth decline was described as a lukewarm “mild uptick” compared to the 7.8% fall in Q2 and 6.6% drop in Q1.

“On a like-for-like basis, Burson saw a mildly improved trend relative to the first half, but still saw revenue less pass-through costs down in the mid-single digits as the business continued to face a challenging environment,” WPP said. “We continue to be encouraged by improved new business momentum, in particular in the U.S., and expect an improving trend into year-end.”

The performance of Burson is brought more starkly into focus now it is the sole big brand in WPP’s PR segment (Ogilvy PR reports under Ogilvy in the Global Integrated Agencies arm.)

The holding company’s CFO Joanne Wilson noted on the analyst call: “We continue to see the negative impact of disposals and in particular FGS Global, which represented a drag on reported sales of 3.2%. This effect will tail off in the fourth quarter when we anniversary the sale of FGS in November.”

She added that PR had faced a more challenging performance in Europe and better new business momentum in North America.

In terms of overall sectors, automotive, CPG and technology struggled, whereas healthcare picked up nicely. WPP client wins in Q3 included Marks & Spencer, Maersk, Suncorp, TruGreen and MasterCard.

Analyst responses were brutal. “Will the bleeding ever end?” said MoffettNathanson. “Vicious circle,” said Bank of America Securities. “New management shows commitment, but the gap has never been wider, we wouldn’t touch WPP stock here,” said SSR. “Long way to go,” said Morgan Stanley. “Earnings missing on all cylinders,” said Morningstar. “Similar strategy, different results?” said Barclays. “Plumbing the depths,” said Kepler Cheuvreux. “Revenue results worse than expected, guide cut, brutal,” said Huber Research. “Cutting estimates following Q3; reiterate sell,” said UBS. “Caution vs capitulation,” said Deutsche Bank.

There is much change on the horizon at WPP as the new CEO attempts to turn this once marketing services powerhouse around. It seems all options are being considered and nothing is off the table.

Allied to Omnicom finalizing its acquisition of Interpublic Group later this month, the next quarter is going to be one of the most significant in the history of holding companies in our space.