WH Smith said it was trading ahead of its expectations for the year after stronger passenger numbers at airports and train stations helped the British retailer post a better-than-expected half-year profit on Thursday.
The travel industry has made a strong comeback from pandemic lows as offices reopened and more people took leisure trips after months of restrictions, although rail strikes in the UK have caused some disruptions in the sector.
Worldwide Stores
The London-listed company, which has stores in travel hubs across the world, reported headline profit before tax of £45 million ($56.01 million) for the six months ended 28 February, compared with £14 million a year earlier.
Analysts on average had expected pretax profit of £42.6 million, according to a company-compiled consensus.
In its statement, the retailer said 'current trading is strong and we are ahead of expectations for the full year', without giving further details.
Forecasts
WH Smith said it expects its North America division to post a full-year trading profit of over £50 million, compared with £33 million the previous year.
This would make it the company's second-largest division after the UK travel retail business by the end of the year.
WH Smith, which sells books, stationary and drinks in retail stores across the UK, said its high street business is on track to deliver its cost savings target of £13 million for the year, as it saved £7 million in the first half thanks to a fall in rents.
Given the company's lower priced range of products, it has also been able to manage the impact of inflation well, CEO Carl Cowling told Reuters.
"We don't really have the inflationary pressures that say, food retailers have, so we have been able to navigate it quite well," he said.
Shares Fall
Despite the robust performance, WH Smith's shares were down 1.8% at 1,595 pence as of 0930 GMT, reflecting disappointment in some segments of the business.
Brokerage RBC said sales in the UK travel business were lower than it expected and that the high street recorded slightly lower-than-estimated margins.
Read More: Retailer WH Smith's Revenue Jumps As Travellers Return
News by Reuters, edited by Donna Ahern, Checkout. For more retail news, click here. Click subscribe to sign up for the Checkout print edition.
