Shares in Publicis took a fall after the group cut its 2019 revenue growth guidance late last week. The announcement saw the group report lower-than-expected revenue for the second quarter of 2019 causing shares to plunge 8.5% to their lowest level since December 2012 in early trading on Friday.
The company posted organic growth of 0.1% against analyst expectations of 0.7% for the quarter and put its 2020 targets under review.
North America was down 1.7%, due to CPG clients, which makes p around 25% of its clients, spending less on traditional advertising, the Publicis said in a statement.
“We need to fix this,” Chief Executive Officer Arthur Sadoun said on Thursday. “We are talking about clients who are very satisfied with our job, with whom we’re gaining market share but who are reducing ad spend.”
According to Reuters, brokerage Liberum downgraded Publicis to “hold” from “buy”.
“Operationally, the weakness in North America is the biggest concern given Publicis is the strongest player in North American media buying, which should be the highest margin part of the business and we now have two major agencies (WPP and Publicis) both having weakness in North America, which raises questions as to what is happening in this particular market,” wrote Liberum.
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