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WH Smith turnaround takes hit as profit misses targets
WH Smith’s turnaround has faltered, with annual pre-tax profit falling short even of the reduced target set after several profit warnings. The result highlights the pressure on the travel retailer from subdued consumer confidence and travel disruption, as its new executive chairman begins a major overhaul.
Profit was £73m for the year to the end of August, down 28 per cent on the previous year and £2m below its £75m target. UK revenue rose 4 per cent to £870m, led by hospital stores, where revenue grew 9 per cent; airport sales increased just 1 per cent on a like-for-like basis. North American revenue rose 9 per cent to £437m, but like-for-like growth there was flat in the 10 weeks to 7 November.
In short
- Profit fell 28 per cent to £73m.
- WH Smith missed its reduced £75m target.
- The new chairman has begun a fundamental reset.
Steelman: both sides, in good faith
The strongest fair case each way — we don't pick a winner.
The case for
The results show WH Smith is operating in a difficult climate: subdued consumer confidence and travel disruption have weighed on sales, while UK revenue still grew, led by hospital stores, and North American revenue rose over the year. Supporters of the overhaul could argue that the new executive chairman needs time to address uneven performance and that a single year’s profit miss does not settle whether the business can recover.
The case against
The profit fell 28 per cent and missed even the reduced £75m target, suggesting the turnaround has not yet delivered reliable results despite earlier warnings. Critics could argue that weak airport growth and flat recent like-for-like sales in North America point to deeper trading problems, making stronger evidence of improvement necessary to justify confidence in the overhaul.
Explained simply
WH Smith began as a high-street bookseller and now mainly runs shops in places such as airports, railway stations and hospitals. These outlets sell books, food, drinks and travel essentials to people on the move or visiting patients.
The company’s performance depends on how many people pass through these locations and what they choose to buy. Changes to travel, household budgets and consumer confidence can affect sales, while costs such as rent and staffing also influence profit.
An executive chairman is a senior leader who helps guide a company’s strategy as well as overseeing its board. At WH Smith, that role comes as the retailer reviews how its business is organised and seeks to improve its performance.
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