Wednesday preview: WH Smith unfolds trading update

UK stationary and newsagent retailer WH Smith reports a trading update on Wednesday, covering the first 20 weeks of fiscal year 2017.

At the full year results in October 2016, WH Smith reported group revenue rose 1% on a like-for-like basis, as a 4% increase in sales at its Travel division offset a 2% decline at High Street stores.

The company’s Travel business, which includes stores at airports and train stations, has become the main driver of the group’s revenue. In an effort to turn around the High Street unit, WH Smith is working on cutting costs and improving margins.

Investors will be focused on the progress WH Smith has made since the annual results.

Numis analyst Matthew Taylor said: “We expect the group to deliver an in-line update, with assurances on the strategic outlook, gross margin gains and cost savings programme.”

The broker added that WH Smith has some “challenging” comparatives from last year when Travel delivered like-for-like sales growth of 5% over the first 20 weeks of 2016. The High Street saw flat like-for-like sales over the period.

“Our fiscal year forecasts assume like-for-likes of +4.5% in Travel and -2.0% in High Street,” Taylor said.

Wednesday 25 January

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