British retailer WH Smith has taken the unusual step of slashing its profit guidance after "an overstatement of around £30 million of expected Headline trading profit in North America."
The unwelcome news was released to investors via a Stock Exchange announcement this morning, triggering an immediate collapse in the share price, which dropped 30% in early trading. This morning's price of 770 pence reduced the shares to levels not seen for well over a decade.
Blandly headlined, "Update - North America," the "Revised guidance" said: "In preparation for the Group's year end results for the financial year ending 31 August 2025, a current financial review has identified an overstatement of around £30m of expected headline trading profit in North America. This overstatement is largely due to the accelerated recognition of supplier income in the North America division."
The statement continued: "WHSmith now expects headline trading profit from the North America division for the financial year ending 31 August 2025 to be approximately £25m, down from previous market expectations of approximately £55m. As a result, the Group expects full year headline profit before tax and non-underlying items to be in the region of £110m. The Board has instructed Deloitte to undertake an independent and comprehensive review."
WH Smith is due to release its results for the year to August 31 on November 12.
In March, the company sold its 480-outlet bookstore chain for £76 million (about $98 million), to private equity firm Modella Capital, which has renamed the business TGJones. The WH Smith brand was not included in the sale, meaning that the WH Smith name is no longer associated with selling books and instead linked to its travel stores, which it operates across 32 countries.
A version of this article originally appeared on BookBrunch.
