WH Smith encouraged by improving trends
WH Smith has said it has been encouraged by improving trends in its performance despite the continued impact of the coronavirus pandemic.
In a trading update ahead of reporting its full year results in November, the book and stationery retailer said total revenue at its high street business in the eight weeks to 28 August came in at 84% of 2019 levels.
WH Smith said its strategy within its travel business is to focus on customer conversion and increasing average transaction value. While UK passenger numbers remain significantly down versus 2019 levels, the retailer said it saw a gradual recovery in sales as restrictions eased throughout July and August, with revenue reaching 64% of the 2019 level. This meant that group sales were 71% of what they were in the corresponding period two years ago.
Outside of the UK, the retailer’s North America business performed well in the two-month period with sales at 93% compared to 2019 levels.
WH Smith said it now expects the outcome for the year to 31 August 2021 to be slightly ahead of expectations outlined on 8 July and said it remains confident that revenues will return to pre-Covid levels in the next two to three years.
The retailer added: “While there will be a return to good levels of profitability in the year ending August 2022, the trajectory of the recovery in travel remains uncertain. This combined with the previously announced accounting finance charges relating to the successful convertible bond issue on 29 April 2021, means that we currently anticipate the levels of profitability for the year ending August 2022 will be at the lower end of market expectations.”
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