WPP (WPP.US) issues profit warning + CEO succession crisis: Loss of key clients such as Mars leads to downgrade of net income expectations by 3%-5%

London-based advertising giant WPP Plc. (WPP.US) announced in its latest report on Wednesday that it is revising down its performance expectations for 2025, intensifying its search for a new CEO. According to the announcement, the full-year net revenue, excluding pass-through costs, is expected to decline by 3% to 5% compared to the previous forecast of a maximum 2% decline; and the operating profit margin could drop by up to 175 basis points year-on-year, contrasting with the previous expectations. Current CEO Mark Read admitted in a statement, "Performance in June was weaker than expected, and the soft trading trends in the first half of the year may continue into the second half." This performance warning is particularly challenging for WPP, which is in a period of leadership transition as Read is set to retire at the end of the year, and the company is currently fully focused on selecting his successor. The British company, which has long been a global leader in the advertising industry, has been restructuring its business and optimizing costs in recent years, and has announced plans to invest hundreds of millions of pounds in technology upgrades, with a focus on cutting-edge areas such as artificial intelligence to revitalize growth. It is worth noting that WPP has recently lost several major client contracts, including the $1.7 billion global creative business of Mars Incorporated (M&M's, Snickers parent company), which was ultimately acquired by French group Publicis. Despite this, the company maintained its full-year performance guidance in its report released in April. At the time, Read stated that there was no evidence of clients adjusting expenditure plans due to tariff policy changes, but he did warn that the Western European market, especially German clients, were showing a "slow start" this year. The capital markets reacted strongly to the latest news: as of writing, WPP's US stock price had fallen by about 15.8% in pre-market trading, at $30.15, reflecting investors' continued concerns about the cyclical weakness in the advertising industry and the effectiveness of the company's transformation efforts.