19th Jan 2005 07:00
Smith WH PLC19 January 2005 19 January 2005 WH SMITH PLC POST CHRISTMAS TRADING STATEMENT Profits year to date substantially improved year on year WH Smith PLC is today providing an update on its Christmas trading performancefor the 6 weeks to 15 January 2005 and for the 20 weeks to 15 January 2005. The Group's profitability for the year to date has improved substantiallycompared to the prior year. This result has been driven by a materialimprovement in profitability in High Street Retail as a result of a significantincrease in gross margin and tight cost control, together with strongperformances from Travel Retail and News Distribution. Total Retail like for like (LFL) sales were down 1% for the 6 weeks and down 2%for the 20 weeks. This sales performance reflects our planned focus on marginimprovement, in particular not chasing unprofitable sales, and the difficulttrading environment. Retail LFL sales in High Street Retail were down 2% for the 6 weeks and down 3% for the20 weeks. However, gross margin improvement in excess of 200 basis points hasbeen greater than anticipated and cost savings have been delivered faster thanplanned. Consequently, High Street Retail profitability is substantially aheadof the prior year. Gross margin improvements in the High Street business were driven by a number offactors. These include the planned reduction in unprofitable promotions andfocus on profitable sales, an encouraging performance from new stationeryinitiatives (which have positively influenced the business's mix) and improvedbuying terms. In addition, product availability was ahead of target, andsignificantly improved compared to last year, stock levels and markdowns weretightly controlled and seasonal stock has sold through well. By category, our Retail LFL sales and margins were as follows: Book sales forthe 20 weeks were below the prior year as we avoided last year's unprofitablepromotions, but this was compensated for by the consequent gains in grossmargin. Core stationery saw strong LFL sales and gross margin improvement whileNews & Impulse delivered steady LFL sales and a good improvement in grossmargin. Entertainment, where we have reduced our exposure, continued to bedifficult from a sales perspective, as key DVD titles underperformed marketexpectations, but gross margins held steady. In Travel Retail a stronger than expected 4% LFL sales growth for the 6 and 20weeks periods reflects a particularly strong performance in airports. The salesgrowth has also been accompanied by an improvement in gross margin. News Distribution In the 20 weeks to 15 January 2005, LFL sales for WHSmith News were up 2% as thebenefits of improved customer focus continue to deliver a strong financial andoperational performance. Commenting on the Group's performance, Kate Swann, Group Chief Executive said: "Progress against our plan to deliver value to shareholders is encouraging.Customer response to increased product choice, better availability and improvedstore standards has been positive. This is a long-term recovery programme andmuch remains to be done; however, we are on track and confident in the outcomefor the year." -ENDS- Note: All references to profitability in this statement refer to operatingprofit before exceptional items of the continuing businesses. Enquiries: WH Smith PLCLouise Evans Media Relations 020 7514 9624Mark Boyle Investor Relations 020 7514 9630 BrunswickTom Buchanan 020 7404 5959Pam Small Notes to Editors WHSmith's best selling titles by volume over the Christmas period were asfollows: Books - Non-FictionJamie's Dinners Jamie OliverThe Two of Us: My Life With John Thaw Sheila HancockHimalaya Michael PalinRobbie Williams: Feel Chris HeathWhat You Wear Can Change Your Life Trinny Woodall Susannah Constantine Books - FictionThe Da Vinci Code Dan BrownThe Graft Martina ColeBridget Jones, Edge of Reason Helen FieldingDeep Black Andy McNabTrace Patricia Cornwell DVDHarry Potter and the Prisoner of AzkabanI, RobotLittle Britain: Series OneSpiderman 2Lord of the Rings: The Return of the King MusicRobbie Williams Greatest HitsU2 How To Dismantle An Atomic BombIl Divo Il DivoScissor Sisters Scissor SistersKylie Minogue Ultimate Kylie Magazines OK!Delia's Complete ChristmasRadio Times ChristmasOnly Fools and Horses Collection1966 World Cup This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Wh Smith