WHSMITH insisted yesterday that it would continue to grow profitably despite marking the start of its financial year with a three per cent drop in total sales.
The high street retailer saw like-for-like sales, which strip out the effect of new store openings, fall four per cent in the 10 week period from 1 September 2012 to 10 November 2012, compared to the same period last year.
WHSmith Travel, the division that runs the group’s newsagents in airports, stations and bus depots, continued to outperform with flat total sales compared to a five per cent drop in total sales at its high street stores.
Like-for-like sales were down four per cent in the travel division and five per cent on the high street.
Nonetheless, WHSmith said it had managed to increase its gross margins, and that its store opening plan was going according to plan.
It also said its share buyback plan was on track, with £6m of the £50m total it pledged to return in August so far returned to shareholders.
“Whilst the current climate continues to be challenging, we remain a resilient business and are well positioned for continued profitable growth,” it said.
Panmure Gordon analyst Philip Dorgan maintained his “hold” rating on WHSmith, noting that “profits are driven by gross margin gains and cost control, rather than sales growth.”