WH Smith keeps books in order but sales continue to dwindle

Kasmira Jefford
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WH SMITH, the bookseller and stationary retailer, saw its share price rise 2.7 per cent yesterday after it posted an improvement in profit margins despite stores’ sales continuing to fall.

Like-for-like sales in the first 15 weeks to 9 June dipped three per cent compared to the same period last year, although this was a slight improvement on the five per cent fall in the first half of the year.

At its high street division, like-for-like sales fell four per cent whiles sales at its stores situated in airports and train stations were down by three per cent. The group said margins improved across both arms of the business.

Under chief executive Kate Swann’s leadership, WH Smith has offset flagging sales by trimming store costs and moving away from lower margin products like DVDs.

Seymour Pierce analyst Freddie George, who retained a full year pre-tax profit forecast of £99.50, highlighted the strength of management and strong cash flow. But other analysts were skeptical, with Panmure Gordon calling its business model “unsustainable.”