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WH Smith delivers more of the same

The retailer is trying out a new format on its high street estate - one where, perhaps, it fits threadbare carpets from the off rather than letting them become so - but the main focus remains on its travel-hub outlets

WH Smith
Full-year results are scheduled to be released in October

The pre-close trading update for WH Smith PLC (LON:SMWH) was a familiar story of the travel-hub outlets outperforming the high street shops.

The retailer said its Travel business – the one focused on mainline railway stations, airports and other travel hubs – continued to perform strongly while the High Street business continued to perform in line.

Management has long had a policy of effectively running the high street shops for cash to invest in the Travel business where the growth opportunities are greater.

READ: WH Smith’s move away from the high street is paying off​

On the Travel side, the new store opening programme is in line with the management’s plan.

“We opened eight stores in Madrid Terminal 4 in mid-August and have also opened the first of six stores in Rio de Janeiro. We now have 286 stores open internationally and we continue to see further opportunities in the international news, books and convenience travel market,” the company said.

In the High Street business, the focus remains on cost savings and margin improvements.

Cost savings and margin improvements have been delivered in line with the focus on increasing profits rather than on driving sales.

“We continue to invest in our new store format trials and have developed further our stationery ranges,” the statement said.

WH Smith said it expects results for the year to the end of August will be in line with expectations.

“As remarked in June, continued underinvestment in the High Street side of the business should not cloud the view that WH Smith is building a strong brand in Travel that has significant room to grow overseas,” commented Neil Wilson of Markets.com.

“This significantly reduces its exposure to the ailing UK high street – a strategy that increasingly looks like a master-stroke. While high street footfall is coming off, global air travel passenger growth is only heading up, and fast,” he added.

Shares in WH Smith were up 0.5% at 2,062p.

Quick facts: WH Smith PLC

Price: 2232 GBX

LSE:SMWH
Market: LSE
Market Cap: £2.41 billion
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