WH Smith (LON: SMWH), the travel retailer behind airport and railway station shops, reported a fall of about 30% in headline pre-tax profit to £76m today, and its shares dropped about 10%. Sales rose 5% to £1,625m in the year to the 31st of August; headline profit, which excludes one-off charges, was £108m a year earlier.
The shares traded at 383p at 8.45 am, down 10.35% from yesterday’s close of 427.2p, after opening at 400p. The quote is delayed. The fall followed the 7am results. The stock has lost about 40% over the past year.
The company blamed competitive UK airport contract renewals, which raised rents, along with inflation, weak consumer demand, more promotions in the second half and lower brand marketing and supplier income. It described the £76m as in line with company guidance.
UK trading profit fell to £107m from £130m, and the group trading margin slipped to 8% from 10%. Headline diluted earnings per share fell to 30.3p from 43.4p.
The new year offers little relief. Like-for-like revenue, which strips out store openings and closures, was flat in the first 10 weeks to the 7th of November, with North America down 5%. FY27 headline profit guidance of £75m to £85m, which the company said matched market expectations, is flat at best against £76m.
| Metric | FY26 | FY25 |
|---|---|---|
| Revenue | £1,625m | £1,553m |
| Trading profit | £130m | £159m |
| Headline profit before tax | £76m | £108m |
| IFRS (loss)/profit before tax | (£107m) | £2m |
| Headline net debt | £325m | £390m |
Profit before tax under IFRS, the standard accounting basis, swung to a £107m loss because of £164m of one-off items. These included about £103m of impairments (write-downs of asset values) and onerous-contract charges, largely in North America.

Executive Chair Leo Quinn is closing loss-making stores and tightening cost and cash discipline. For traders, the turnaround is a cost-reset story rather than a growth story. Quinn said:
This last year, we have commenced a fundamental reset of the Group.
Leo Quinn, Executive Chair, WH Smith
The medium-term targets are a UK trading margin of 12% to 13% and a North America margin above 8%, against 8% for the group this year.
