Skip Header
Important information: The value of investments can go down as well as up so you may get back less than you invest. Investors should note that the views expressed may no longer be current and may have already been acted upon. This is a third-party news feed and may not reflect Fidelity’s views.

WH Smith sales boosted by travel segment

(Sharecast News) - WH Smith posted an 8% jump in total group revenues for the 20 weeks to 20 January 2024, as it hailed strong momentum in the travel business and struck an upbeat note on the outlook. Total sales in the travel segment were up 13% on the same period a year earlier, or 16% on a constant currency basis.

Total revenue in Travel UK - the company's largest segment - rose 15% on the same period a year earlier, or 14% on a like-for-like basis. WH Smith said it continues to see improving passenger numbers across UK Air, and a strong performance in Hospitals, while Rail is performing well.

Revenue in North America rose 7%, but was flat on a LFL basis, while Rest of World saw total growth of 19% and LFL growth of 12%.

Chief executive Carl Cowling said: "During the period, we successfully opened our largest UK Travel store at Birmingham airport - a one-stop-shop for travel essentials - and we have received very positive feedback from both landlord and customers.

"We continue to make excellent progress in North America, and I am particularly excited by the substantial growth opportunities that exist in this market. We are on track to open over 50 new stores in North America this financial year.

"In total, we are on track to open over 110 stores this financial year.

"The group is trading well and is in its strongest ever position as a global travel retailer. We are confident of another year of significant growth in 2024."

Russ Mould, investment director at AJ Bell, said: "There are two tasks for WH Smith's management on a rolling basis - keep the travel stores growing and make sure the UK high street stores remain stable. Its latest trading update shows the retailer has essentially delivered on both counts but it is certainly not a five-star performance.

"The travel arm is doing ok - its stores in transport hubs can charge more for food, drinks and other products as there is not a lot of competition and travellers do not have either the time or even the option to find alternative shops.

"WH Smith continues to open new travel stores and it is benefiting from the ongoing strength in the travel sector where individuals seem happier to spend more on experiences than material goods. Train strikes in the UK are unhelpful but the travel arm is a global business so benefits from geographic diversification.

"The key area to watch is the pace of revenue growth in the US, which has ground to a halt on a like-for-like basis. That puts more pressure on the group to accelerate new store openings while also getting the tills ringing more often in existing sites.

"The high street business is essentially the cash machine which provides strong support for the group to expand and pay dividends to shareholders. The stores are not shiny and new, little money seems to be spent on refurbishments and it appears to run on a skeleton crew as it cuts costs to the bone. For as long as people are buying the odd magazine, paperbacks, stationery, wrapping paper or board game, WH Smith's high street shops stand a good chance of survival.

"Like-for-like high street revenue in the 20 weeks to 20 January 2024 fell by 3% which isn't disastrous and is in line with management's expectations. No-one expects the UK high street arm to deliver spectacular revenue growth, its job is to simply keep ticking over and make a tidy profit."

Share this article

Related Sharecast Articles

Unilever to cut third of office roles in Europe - report
(Sharecast News) - Unilever is reportedly planning to cut a third of all office roles in Europe by the end of next year, as the company's new chief executive forges ahead with his plan to boost growth at the struggling consumer goods giant.
BHP and Vale ink deal on UK group action for 2015 Brazil dam breach
(Sharecast News) - Iron ore miner Vale has agreed to pay half of any awards to claimants as part of the UK group action against BHP for the 2015 failure of the Fundao dam in Brazil.
JP Morgan reports big jump in Q2 revenues and profit, but cautions on tail risks
(Sharecast News) - JP Morgan posted big increases on both its top and bottom lines, even as its boss continued to call attention to the potential risks on the horizon.
Months of AT&T call records exposed in data breach
(Sharecast News) - American telecoms giant AT&T revealed on Friday that the call and text logs of its customers were hacked between May and October 2022, and said that at least one person has been arrested.

Important information: This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice. When you are thinking about investing in shares, it’s generally a good idea to consider holding them alongside other investments in a diversified portfolio of assets. Past performance is not a reliable indicator of future returns.

Award-winning online share dealing

Search, compare and select from thousands of shares.

Expert insights into investing your money

Our team of experts explore the world of share dealing.