WH Smith Trims Profit Outlook as North American Weakness, Margin Pressures Persist

WH Smith (LON:SMWH) announced Wednesday it now expects full-year pretax profit to come in at the low end of its previously guided range, citing pressure on margins from higher costs and a continued slowdown in its North American business.

Revised Profit Guidance

The retailer projects its fiscal year 2026 pretax profit will be approximately £75 million. This marks the bottom of its prior forecast, which ranged from £75 million to £90 million.

In response to the update, shares of WH Smith initially fell by as much as 4% before paring losses to trade down 0.9% at 359.6 pence, according to the report. This performance contrasted with the broader FTSE 250 index, which was slightly positive.

North American Headwinds

A key driver for the revised outlook is the persistent weakness in the company's North American operations. The division is facing significant challenges, including:

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• A 3% decline in like-for-like sales during the fourth quarter.
• Softer consumer demand and lower-than-expected passenger traffic through its travel hubs.

WH Smith said it is actively reviewing its U.S. operations and closing underperforming stores. This follows two previous profit forecast cuts and a capital raise earlier in the year as the company works to implement turnaround measures.

UK Performance Offers Offset

While the North American market struggles, the company's UK business provided a partial offset. According to WH Smith, its UK operations saw like-for-like sales rise by 4% in the fourth quarter.

The update highlights the difficult environment for travel-focused retailers, as margin compression from inflation and promotional activity combines with fluctuating passenger volumes, placing investor focus squarely on the performance of the company's overseas recovery efforts.