WH Smith shareholders eye growth plans after sale of high street stores
Investors in WH Smith will be keen for more details on its strategy after agreeing to sell its UK high street stores and the potential impact of US tariffs when the retail firm updates the market next week.
It has been a busy start to 2025 for the historic retailer as it has pivoted to focus solely on its growing travel store business.
On Wednesday April 16, WH Smith will update shareholders on its trading for the past six months in its first major update since selling off its estate of high street shops across the UK.
Last month, WH Smith announced that Hobbycraft owner Modella Capital will buy the division for around £76m.
The new owner will rebrand the high street chain – which has 480 stores and 5,000 staff – as TGJones.
Chief executive Carl Cowling said the sale deal was linked to its “strategic ambition to become the leading global travel retailer”.
In recent years, the firm’s travel division – which also includes shops in hospitals – has grown to make up the bulk of its sales and profits, expanding to more than 1,200 stores across 32 countries.
Shareholders will be keen for more guidance on what the sale deal and the increased focus on travel means for its longer-term outlook.
Despite the significant deal, shares in the business dropped to their lowest level since 2020 earlier this month.
The company is among retailers with exposure to the US market which have seen their value knocked by President Donald Trump’s US tariff plans.
Analysts at highlight that around 28 per cent of its sales and 30 per cent of its profits for the current financial year are expected to come from the US, which also includes Marshall Retail Group (MRG) and InMotion stores.
Investec suggests the company may see more of an impact from a “macro-economic slowdown rather than a tariff impact”, as weaker growth may affect traveller numbers.
Nevertheless, the brokerage said it expects any impact on the cost to its own-label products to “be passed on in higher prices”.
Shareholders will, therefore, be keen for the company to shed light on how the tariffs are expected to impact on its pricing and profitability over the next year.
WH Smith is also likely to reveal how it can mitigate any cost pressures caused by the change in policy.
The company is expected to report a headline pre-tax profit of £43m for the past six months, which would be down slightly against the same period last year, following weaker profitability from the high street arm.
WH Smith is expected to see profits improve in the second half of the year amid a seasonal boost from a rise in travellers using its airport shops.
By Henry Saker-Clark, PA Deputy Business Editor