15th Jun 2022 13:57
(Alliance News) - WH Smith PLC had a good third quarter thanks to its Travel arm, which helped to offset a lacklustre performance from its High Street business.
Shares in the retailer - which sells books, magazines and stationery on the British High Street as well as in travel locations such as airports and train stations globally - were up 6.7% at 1,499.50 pence in London on Wednesday afternoon. Over the past 12 months, shares have fallen 16%.
For the 15 weeks to June 11, total revenue was above its pre-pandemic level for the first time, driven by the Travel arm, which saw sales at 123% of its 2019 level. Total revenue was 107% of the 2019 level.
The Travel rebound was led by North America, where sales were 111% of 2019, while they were 104% in the UK and only 88% in the Rest of the World region.
Meanwhile, High Street operations saw revenue at just 79% of 2019 levels so far in the company's third quarter, worsening from the second quarter figure of 84%. "This includes the impact from the cyber incident on Funky Pigeon. We saw a good performance from our Platinum Jubilee ranges, which resonated well with customers, and our focus on front-of-store mega deals is delivering good results," WH Smith noted.
With its travel arm's strong performance expected to carry into the peak summer trading period, WH Smith said it now expects full-year results at the higher-end of analyst forecasts.
Broker Peel Hunt said Wednesday's outlook upgrade shows WH Smith is "now almost wholly a Travel business."
"This is highly pleasing and most of the good work is being done by air," said Peel Hunt, adding that the weaker performance from the High Street arm was "unsurprising" given a lack of footfall and the Funky Pigeon cyber attack.
"We have always maintained that WH Smith would come out of the C-19 crisis stronger and these are early signs that this is the case: market share is being won and if passenger numbers continue to rebound, forecast momentum is highly positive. It's an if, of course, but we are hopeful," said Peel Hunt.
By Lucy Heming; [email protected]
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