WH Smith reports solid update in sales

UK retail group WH Smith said today it was braced for a competitive Christmas after it reported lower sales over the last ten weeks of trading.

The group said like-for-like sales were down 1% on a year earlier, with the performance from high street stores showing a 2% decline.

However, this was better than the 4% high street fall forecast by some analysts, with trading supported by the early release of popular books, including titles from Jamie Oliver and Nigella Lawson.

In the company's travel business, which operates from more than 300 sites at airports and railway stations, like-for-like sales were 1% higher. This would have been an increase of 3% without the impact of lower tobacco sales.

WH Smith recently reported underlying pre-tax profits of £66m (€92.4m) for the year to August 31, a 29% improvement over last year and ahead of forecasts in the City of £63m (€88.1m).

The company, which has 544 high street stores, said today it remained wary despite its steady start to the financial year.

It added: “Whilst we remain cautious about the consumer environment and anticipate competitive trading in our markets over the key Christmas period, the current financial year has started as we expected.

As part of recovery plans, chief executive Kate Swann has overseen a move away from a reliance on the highly competitive entertainment market, including CDs and DVDs, back towards its core books, stationery and confectionery markets.

Nick Bubb, a retail analyst at Pali International, said: “The trading update flags that the new year has started quite well and although WH Smith say that they are cautious about Christmas they always are cautious and yet they always deliver the goods, thanks to strong margin control.

“WH Smith has been active promotionally, to drive early footfall and remind consumers of the strong value they will get at Christmas.”

The company recently announced plans to open 71 Post Office concessions in its stores. It said today the opening programme had continued in line with expectations.