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'Resilient' Christmas trading for W H Smith
25.01.12 | Lisa Campbell
W H Smith has reported “resilient” trading over the Christmas period, with total group sales down by 3% and like-for-like revenues down 5% but profits “in line with expectations”. Retail analyst Nick Bubb said W H Smith had “again delivered the goods”.
In the high street retailer's trading update for the 21 weeks to 21st January 2012, its Travel arm once again out-performed its High Street business.
Total Travel sales were up 2%, but like-for-like sales were down 3%, in comparison to High Street, where total sales were down 5% on the high street and like-for-like sales dropped by 6%. Excluding entertainment, like-for-like sales were down by 4% on the High Street, where “costs were tightly managed, reflecting trading conditions” and gross margin improved in the time period.
The company reported that its store opening programme for the Travel arm remained “on track” with further opportunities for growth in the UK and abroad.
In October 2011, WHS confirmed it had 60 international units in operation or agreed in Australia, India and the Middle East in places such as Hyderabad and Dubai, and last week it was reported the retailer would branch out into Qatar after entering a franchise agreement with Al Meera Holding, a consumer goods company.
This morning (24th January) Kate Swann, WHS group chief executive, said the months of November and December now made up for less than half the group annual profit compared to over 90% of group profit six years ago.
She said: "During the period we saw a resilient performance in challenging trading conditions. Gross margin was in line with plan and costs were tightly controlled.
"Over the past six years both businesses have consistently increased profits and the Group is now well balanced between Travel and High Street… Looking ahead, we expect the trading environment to be challenging however we have planned accordingly and continue to be confident in making further progress in the year.”
WHS did not release any information about the sale of Kobo e-readers and e-books over Christmas, but Todd Humphrey, business development manager for Kobo, said: "Our launch success with W H Smith has exceeded all expectations. With e-readers being the gift of the holiday season, we enter 2012 with tremendous momentum.”
Retail analyst Nick Bubb said WHS had “again delivered the goods” and had narrowly beaten his predicted -7% like-for-like sales drop on the high street by reporting a -6% decline.
“W H Smith always gets criticised for declining like-for-like sales, but never get the credit for engineering a richer sales mix,” he said.
Bubb added the -3% like-for-like decline in the company’s Travel division was “in line with expectations” and reflected “weak airport passenger traffic".