By Scott Kanowsky
Investing.com -- Shares in WPP PLC (LON:WPP) fell toward the bottom of the pan-European Stoxx 600 on Wednesday, after the world's largest advertising group lowered its outlook for full-year operating margin growth and warned of possible economic headwinds.
The U.K.-based company now expects its 2022 operating margin to improve in a target range of 30-50 basis points, down from its prior guidance of around 50 bps.
In a statement, chief executive officer Mark Read said the adjustment stemmed from ongoing investment in "our people and in data and technology."
He also flagged that the forecast for near-term economic conditions remains unclear, particularly due to soaring inflation that threatens to weigh on client spending.
Analysts at Goldman Sachs added that the margin guidance was impacted by disruptions caused by strict COVID-19 lockdowns in China, where sales slowed significantly in the third quarter.
Despite these concerns, WPP still reported quarterly organic growth of 3.8% to £2.9B, slightly ahead of estimates, as strong performance in the U.S. helped offset a decline in revenue less pass-through costs in western continental Europe.
"We enter the last quarter of the year with confidence, based on the leading competitive position of our businesses, our client momentum and the knowledge that the actions we have taken to strengthen WPP leave us well placed to support our clients in navigating the economic uncertainties ahead," Read said.