16th Sep 2026 10:53
(Alliance News) - WH Smith PLC on Wednesday said full-year profit will be at the bottom-end of already reduced guidance as continued weakness in its US business offset an improved UK performance.
In response, shares in the Swindon, England-based travel retailer fell 2.3% to 354.40 pence each in London on Wednesday. They have fallen 48% in the past 12 months, hit by a series of poor trading updates and an overstatement of profits in its North American division.
In a trading update, WH Smith said it expects full-year headline pretax profit before non-underlying items to be around GBP75 million for the financial year that ended on August 31, at the bottom of the GBP75 million and GBP90 million range provided in July.
This would be down from GBP108 million in financial 2025 and compares to market consensus of GBP78 million, cited by RBC Capital Markets.
July's outlook already was lowered from April's guidance of between GBP90 million and GBP105 million, itself cut from GBP100 million and GBP115 million previously.
On Wednesday, WH Smith said the outlook reflects "lower trading profit margins driven by increased promotional activity, a reduction in brand marketing and inflation headwinds, offset by central cost reductions and lower interest costs."
WH Smith highlighted good progress on the company's "transformation" agenda with strong cost and cash management underpinned by working capital improvements, portfolio rationalisation and targeted capital investment in higher-return travel essentials space.
Net debt at August 31 is expected to be around GBP325 million, better than RBC's GBP334 million forecast, with leverage around 2.0 times, in line with expectations.
Like-for-like sales growth in its UK business picked up to 4% in the fourth quarter of the financial year from 2% in the prior quarter. But performance in North America worsened in the quarter, with a LFL decline of 3% compared to flat in the prior three months. In the Rest of the World unit, LFL growth was steady at 3%.
Overall, group LFL revenue growth was 2% in the fourth quarter, up from 1% in the third quarter.
In North America, Air LFL revenue decreased by 2% in the fourth quarter, reflecting lower year-on-year passenger volumes and softer consumer demand.
In Resorts, total revenue in the fourth quarter was down 26% on a year before, reflecting lower visitor numbers and the rationalisation of the fashion store estate which continued "at pace" during the second half.
In the Rest of the World division, WH Smith noted that during the financial year, the group exited Norway, agreed to exit the Denmark and Sweden markets in early 2027, and will exit the Netherlands on lease expiry in 2027 following a decision not to re-tender the contract.
"This division is being actively managed both to exit unprofitable stores and transition sub-scale markets to a franchise model in order to improve profitability and cash generation," WH Smith said.
WH Smith said it will announce preliminary results for the financial year ended August 31 on November 12, and provide an update on its key priorities for the year ahead.
By Jeremy Cutler, Alliance News reporter
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