WH Smith Forecasts Annual Profits Drop to £75 Million

Retailer WH Smith expects annual underlying pre-tax profits for the year ending August 31 to drop to approximately £75 million. This figure represents a significant decrease from the £108 million reported in 2024-25 and sits at the bottom of the company's June forecast range of £75 million to £90 million.

The company attributed the decline to inflation headwinds, reduced brand marketing, and lower trading profit margins resulting from increased promotional activity. Despite the profit drop, the retailer reported a 2% rise in like-for-like sales, driven by growth in hospital sites and rail stations, alongside a 2% recovery in airport sales during the final quarter.

These financial results arrive as the company manages the fallout from a North American accounting error that overstated profits by up to £50 million. The error led to the resignation of former CEO Carl Cowling in November. The Financial Conduct Authority and the UK's accountancy watchdog are currently investigating the matter, including the auditing processes used by PricewaterhouseCoopers.