WH Smith PLC (LSE:SMWH) shares fell 4.5% despite a solid trading update on disappointment that the firm didn't raise guidance once more.
"The shares trade on a mid-teens PE and are excellent medium- and long-term value but the lack of an upgrade today may mean they do not do much up to the prelims in November," said analysts at Peel Hunt.
WH Smith said it expects full-year results to be in line with the upgraded expectations reported in its recent trading update.
The retailer said revenue for the year ending 31 August 2023 was up 28% versus 2022, driven by travel which was up 42%, boosted by much stronger passenger numbers in the second half of the financial year compared to the first half.
The FTSE 250-listed company said its “focused in-store strategy” has delivered strong average transaction growth and higher penetration, “driven by our enhanced ranges including food, and the broadening of our categories, most notably health and beauty and technology”.
In the UK, WH Smith saw continued strength in air passenger numbers in the peak holiday season, building on the recovery in passenger numbers seen in the second half of the previous financial year.
Businesses in North America and the Rest of the World continued to show good momentum, whilst also reflecting the strength in sterling.
Growth plans for the coming financial year include over 40 new stores in North America and 25 new stores in the Rest of the World, which, including the UK travel business, takes planned new store openings to over 80.
WH Smith said its high street business has performed well and in line with expectations.