WH Smith in margin boost

WH SMITH said yesterday a drop in sales over Christmas had been offset by a rise in profit margins.

Sales in the two months to 22 January dropped four per cent at the newspaper, stationery and book chain.

Like-for-like sales, which strip out the effect of new store spaces, fell by seven per cent.

The company said its sales had been hit by the snow but insisted its profit was on course, with cost savings also playing a part.

At railway stations, airports and other travel hubs, the company reported a three per cent sales fall in the 21 weeks to 22 January, with the dire weather causing travel chaos.

Chief executive Kate Swann said: “Our staff worked extremely hard during this period to maintain the best possible service for our customers.”

However, she urged caution over the year ahead, adding: “We expect the trading environment to remain challenging and we have planned accordingly.”

The chain has been focusing on main trading categories such as stationery and books, and away from lower-margin areas such as DVDs and CDs.

The company said it was still on track to meet City forecasts of profit around the £93m mark for the full-year.

Nick Bubb, retail analyst at Arden, said: “The resilient Christmas profit performance shows that the business was not blown off course by the snow and the obvious contrast is with the struggling HMV.”