WH Smith Plc (LON:SMWH) shares gained this morning as the books and stationery retailer said it remains “confident in the outcome for the full year” as it once again reported growth in its Travel business, while its high street sales fell.
In a trading update, the FTSE 250-listed firm said total group sales were up 2% in the 15 week period from 1 March to 10 June 2017, with like-for-like sales flat.
READ: WH Smith's first half revenue flat as sales fall at high street stores
It said total sales in its Travel business – which runs concessions at airports, railway stations, and motorway service areas - were up 8%, of which 2% related to forex benefits from its growing international business, with like-for-like sales up 5%.
WH Smith said: “This sales performance reflects our ongoing focus on customer service, execution, space and category management as well as the continued increase in passenger numbers.”
But in its High Street business, total sales were down 4% in the period, with like-for-like sales also down 4%, albeit in line with expectations.
The group said gross margin improvement and cost savings on the High Street have been delivered in line with plan.
WH Smith concluded: “Whilst there remains some uncertainty with regard to the broader economic environment, we continue to focus on profitable growth, cash generation and investing in the business to position us well for the future.
“We remain confident in the outcome for the full year.”
In early trading, WH Smith shares were 1.2%, or 20p higher at 1,764p.
Trading update follows a familiar pattern
Independent retail analyst Nick Bubb said today’s trading update “follows a familiar pattern, with the fast-growing Travel Division delivering strong LFL sales (+5%) and the 'profit focused' High Street Division clocking up yet another LFL decline (-4%). “
He added: “Needless to say, gross margins are up in both Divisions, in line with plan and WH Smith say that “we remain confident in the outcome for the full year” (which is exactly what they said at this stage last year).
“And visitors to Rome will be pleased to hear that 6 WH Smith units will open in Rome Airport next month.”
-- Adds share price, analyst comment --