WH Smith (LON:SMWH) Issues Quarterly Earnings Results

Key Points

• Revenue increased 5% to £1.6 billion, but headline profit before tax fell to £76 million from £108 million as U.K. trading profit weakened.
• Higher rents on renewed U.K. airport contracts are expected to pressure margins; WH Smith forecasts 2027 headline PBT of £75 million–£85 million and expects U.K. trading profit to be broadly flat next year.
• The company plans to close and open around 100 North American stores each, shifting the mix toward Travel Essentials, with medium-term targets for 20% revenue growth and margins rising from 3% to 8%.

WH Smith (LON:SMWH - Get Free Report) announced its earnings results on Thursday. The company reported GBX (68.70) earnings per share for the quarter, Digital Look Earnings reports. WH Smith had a negative net margin of 9.48% and a negative return on equity of 90.46%. The business had revenue of GBX 162.50 billion for the quarter.

Here are the key takeaways from WH Smith's conference call:

• Revenue rose 5% to £1.6 billion, but headline profit before tax fell to £76 million from £108 million, reflecting lower U.K. trading profit; diluted earnings per share also declined.
• Higher rents on renewed U.K. airport contracts reduced the 2026 margin by about 230 basis points, with a further 30–50 basis-point impact expected in 2027. The company expects U.K. trading profit to be broadly flat next year as cost savings offset some of the pressure.
• In the first 10 weeks of the new financial year, group like-for-like revenue was flat and total revenue grew 1% at constant currency; management said it remains cautious and expects 2027 headline PBT of £75 million–£85 million.
• Free cash flow was £52 million and year-end net debt was £325 million, with leverage at 2x after the June equity raise. However, 2026 included £164 million of non-underlying charges, and the company expects about £40 million of related cash outflows in 2027.
• Management plans to reshape North America by closing around 100 stores and opening around 100, with a greater focus on Travel Essentials; it targets medium-term revenue growth of 20% and margin improvement from 3% to 8%. These are management targets and depend on successful execution of the transformation.

WH Smith Price Performance

Shares of WH Smith stock traded down GBX 30.40 during trading on Thursday, hitting GBX 396.80. The stock had a trading volume of 9,974,678 shares, compared to its average volume of 3,511,507. The business has a fifty day moving average of GBX 393.96 and a two-hundred day moving average of GBX 488.03. WH Smith has a fifty-two week low of GBX 345.60 and a fifty-two week high of GBX 710. The firm has a market cap of £597.18 million, a P/E ratio of -4.10, a PEG ratio of 2.65 and a beta of 0.93. The company has a debt-to-equity ratio of 846.40, a current ratio of 0.33 and a quick ratio of 0.42.

Analyst Ratings Changes

A number of brokerages have recently commented on SMWH. JPMorgan Chase & Co. lowered their price target on WH Smith from GBX 575 to GBX 550 and set an "overweight" rating on the stock in a report on Thursday, September 17th. Canaccord Genuity Group decreased their target price on shares of WH Smith from GBX 555 to GBX 535 and set a "buy" rating for the company in a research report on Wednesday, September 16th. Finally, Berenberg Bank raised their target price on shares of WH Smith from GBX 420 to GBX 440 and gave the company a "hold" rating in a research note on Thursday, September 17th. Three research analysts have rated the stock with a Buy rating and four have issued a Hold rating to the company's stock. According to data from MarketBeat.com, WH Smith has an average rating of "Hold" and a consensus price target of GBX 566.43.

About WH Smith

WH Smith PLC operates as a retailer in the United Kingdom and internationally. It operates in two segments, Travel and High Street. The Travel segment offers news, books, and convenience for travelling customers. It operates stores in airports, hospitals, railway stations, and motorway service areas. The High Street segment sells stationery products, including greeting cards, general stationery, art and craft, and gifting products; news and impulse products, such as newspapers, magazines, confectionery, and drinks; and books.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.