WH Smith has reported positive trading in its stores at travel sites such as airports and railway stations, placing it in a strong position ahead of the busy summer season. This helped offset a further weakening of its high street stores.
In a trading update covering the 13 weeks to 1 June, the company’s Travel division saw like-for-like sales increase 5%. This was driven by 8% growth in the UK and a 7% rise in the ‘Rest of the World’, which offset slower performance in North America (unchanged).
The group commented: “The transformation of the business to a one-stop-shop for travel essentials is delivering strong results, increasing average transaction values and returns.”
WH Smith recently expanded its food-to-go offer, launching its first own-brand range called ‘Smiths Family Kitchen’ in over 300 of its Travel stores across the UK.
Looking ahead, the group said it was “well positioned as we enter our peak summer trading period”, adding: “We are in a strong position to capitalise on substantial growth opportunities across our markets.”
Meanwhile, in a tough trading environment, the group’s High Street unit suffered a 1% fall in like-for-like sales.
Russell Pointon, director of consumer at investor relations business Edison, commented: “WH Smith’s Q324 trading update showed its booming travel business continues to perform strongly whilst the high street continues to decline, and it is reassuring to see the company on track to deliver full year expectations with increasingly decreasing high street revenue.
“Growth has slowed a little since the interim results but this reflects a very strong comparative from the prior year. This is in line with their interim results in April, where the retailer announced that the high street newsagent division is becoming a smaller part of the overall group.
“Looking forward, it seems WHSmith will focus on its Travel divisions to capitalise on growth opportunities and offset the high street struggles. It will be interesting to see if the business takes on a more decisive action on its high street business as the sector continues to struggle.”
NAM Implications:
- Someone at WH Smith must be asking the obvious question…
- …or perhaps they await an offer they cannot refuse?
- Otherwise, ‘good’ will be dragged down by ‘bad’…
