WH Smith up 3% as revenue rises on solid travel business performance

Shares in WH Smith rose 3% on Wednesday after the company said total sales in the 13 weeks to May 30 rose, as the performance of the company’s shops based in stations and airports offset a disappointing performance in its high street stores.

Total group sales were up 1% compared to the same period last year, while like-for-like revenue was unchanged, which was slightly better than consensus analyst expectations.

In the travel business, total sales were up 8%, with like-for-like sale up 4%. The company said its ‘Food to Go’ range, the rollout of which was completed last summer, continued to be well received by customers.

It was different story for the high street business, however, with total sales down 4% in the period and like-for-like sales also down 4%, although the company said gross margin improvement and cost savings have been delivered in line with plan.

“We will continue to focus on profitable growth and cash generation while investing in new opportunities in both Travel and High Street that position us well for the future. We remain confident in the outcome for the full year,” said the company.

Keith Bowman, equity analyst at Hargreaves Lansdown said: “The group’s strategy to focus on profitable growth and cash generation remains compelling.”

“In all, WH Smith continues to deliver. The group’s international store numbers are being expanded, with units at Sydney International Airport set to open from August, whilst group wide cost savings are still being squeezed. For now, analyst consensus opinion continues to denote a buy.”