WH Smith Stock Plummets as North American Profit Forecast Cut

The WH Smith (SMWH.L) share price plunged on Thursday, facing significant downward pressure following the announcement of a substantial reduction in expected profits for the financial year ending 31 August 2025.

The revision stems from an overstatement of approximately £30 million in projected Headline trading profit within the company's North American division.

As expected, the market has reacted negatively to the news, with WHSmith shares down more than 30% in early trading at around 763p per share, its lowest level since March 2020.

The primary driver of the profit shortfall is attributed to the accelerated recognition of supplier income in North America.

WH Smith now anticipates Headline trading profit from its North American operations to reach approximately £25 million, a considerable drop from previous market expectations of around £55 million.

Consequently, the Group's full-year Headline profit before tax and non-underlying items is now projected to be in the region of £110 million.

Adding to the company's recent challenges, in late June it was revealed that the terms of the UK high street business sale to Modella Capital, owner of Hobbycraft, have been revised downwards.

Gross cash proceeds are now expected to be up to £40 million, a reduction from the initially anticipated £52 million. This adjustment, driven by weaker trading conditions and a cautious economic outlook, has further dampened market confidence.

In response to the profit overstatement, the company said it has instructed Deloitte to conduct an independent and comprehensive review of the North American operations.

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