Shares in WH Smith jump 6% as retailer’s airport and railway stores more than make up for its high street blues
- But, across its conventional high-street stores, like-for-like sales fell 1%
- WH Smith said its profitability on the high-street is improving amid cost cuts
Shares in WH Smith are up over 6 per cent after the retailer announced sales across its railway and airport rose by 8 per cent in the last three months.
Across its high-street stores, WH Smith’s sales fell by 1 per cent on a like-for-like basis.
The retailer said profitability over the 13 weeks to 2 June improved as it continued its cost cutting drive.
High-street woes: Across its high-street stores, WH Smith’s sales fell by 1 per cent on a like-for-like basis
The group’s share price is up 6.02 per cent or 119p to 2,095p.
Stephen Clarke, the company’s chief executive, said: ‘We have delivered a good sales performance in the third quarter in both our Travel and High Street businesses.
‘Whilst there is some uncertainty in the broader economic environment, WHSmith serves millions of customers each week and continues to grow both internationally and in the UK.
‘We continue to focus on profitable growth, cash generation and investing in the business to position us well for the future. We remain confident in the outcome for the full year.’
Across the group in its entirety, total sales increased by 4 per cent over the period, and up 1 per cent on a like-for-like basis.
The company said new store openings are on track for its travel business, having targeted between 15 and 20 new sites in the UK this year.
Across its international business, WH Smith said it plans to open eight units in Madrid Airport, bringing the total number of international sites to 282.
A further 10 locations are due to open this year at its global division.
Mike van Dulken, head of research at Accendo Markets, said: ‘Shares in WH Smith top the FTSE350 this morning, trading their best since early February, thanks to a well-received Q3 trading statement versus what it reported for the first six months in mid-April.
‘Group sales +4% year on year compares favourably with flat growth in H1, as does more gross margin improvement thanks to cost savings. Even better is like-for like sales growth of +1% which has reversed from -1%.
‘Even if the High Street remains under pressure, with sales -1% Q3 is the group’s quietest period but still much improved on the -5%/-4% reported for H1. Add to this continued strength in the faster growing and more profitable Travel segment, with revenues +8% versus 7%/3% reported in H1, supported by growing passenger traffic stats from the major airlines, and everything looks rosy.’