WH Smith Plc (LON:SMWH) posted a drop in sales over the Christmas trading period as its high street stores continued to struggle.
The books and stationary retailer said like-for-like (LFL) sales fell 1% in the 20 weeks to January 20.
READ: WH Smith's full year profits rise as travel store sales growth mitigates high street decline
LFL sales at its high street business decreased 4%, driven by weak book sales due to a decline in spoof humour titles and no new major releases.
Shares fell 4.5% to 2,036p in morning trading.
The gross margin rose less than expected due to lower sales of high margin spoof humour books compared to the same period last year when it was boosted by the popularity of titles such as Five on Brexit Island and the Ladybird Book of the Hipster.
The travel division, which includes stores at airports and train stations, delivered LFL sales growth of 3%.
WH Smith said the new airport stores it opened at Gatwick and Stansted during the period are “performing well”. It expects to open about 15 new stores this year in the UK.
"Our travel business now accounts for almost two thirds of the group's annual profit and we continue to deliver strong sales growth across all our key channels," said chief executive Stephen Clarke.
READ: WH Smith maintains full year guidance as it cuts costs to offset sluggish sales at high street stores
"This was driven by ongoing investment in the business and continued growth in passenger numbers in our airport stores over the Christmas period."
Clarke said the group is well positioned for the year ahead despite uncertainty in the broader economy amid Brexit negotiations.
The company will continue to focus on profitable growth, cash generation and investing in new opportunities, he said.
WH Smith expects full year savings of £12mln, slightly ahead of target, as part of its cost efficiency programme.
"Christmas was a stationary affair for WH Smith, with sales flatlining across the group as a whole," said Laith Khalaf, senior analyst at Hargreaves Lansdown.
"The newsagent is now a two tier company, with a high street estate which is withering on the vine, and a travel business which is growing at quite a clip."
However, Khalaf feels it strategy to open more travel outlets has paid off and as a result its share price has doubled over the past five years despite a tough UK retail market.