WH Smith increased its profit forecast for the current financial period as it bets that strong travel demand will continue during the summer.
The retail chain, which sells everything from sandwiches to stationery and is located in airports, railway stations, and other public places, was hard hit by the pandemic lockdowns. The company announced that it would cut 1,500 jobs by 2020 due to travel restrictions.
The retailer’s Travel arm, which has been freed from lockdowns, reported an increase of 31 per cent in sales for the 13 weeks ending 27 May 2023. This is up 18 per cent compared to the same period last year, meaning that expectations for the entire financial year are “modestly better”.
The British Travel division of the company reported a 24 percent increase in sales over the past year, with air sales up 26 percent, hospitals up 33 percent, and rail down 10 cents, despite ongoing industrial action.
WHSmith said that first-quarter group sales increased by 23 percent year over year, following the strong momentum of its travel division.
WH Smith announced last month that its growing business would account for more than 70% of its revenues and 85% of its profits by the end the year. The company’s focus on travel is set to increase as it confirms plans to open over 120 new travel shops. 50 of these will be opened in the current half-year. Around 60 of the new shops will be located in North America, while the remainder will be distributed throughout Scandinavia, Spain and Australia.
WHSmith operates about 250 travel shops overseas and 550 in Britain. It employs about 14,000 people and operates 550 high-street book and stationery stores.
In the 13-week period, the retailer’s online store and high street businesses, including its online shop, saw their revenue increase by 2 percent. WH Smith’s store network has performed well, with revenue totals up by 2 percent compared to the same period last year.
WH Smith stated that it was “in a good position” before the summer peak trading period, and “very well positioned” for future growth in its travel markets.
It said that its expectations for the entire financial year had “modestly increased” but didn’t provide a range of outlook.
In the morning, shares of WH Smith rose by 28p or 1.37 percent to £15.49. The stock price has fallen 2.63 percent in the last year.