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WHS sees sales drop but 'confident' for next year
14.06.12 | Lisa Campbell
W H Smith has reported a like-for-like sales decrease of 3% across the group in the last quarter but continues to grow margins and remain “confident” for the next year, the retailer has said today (14th June).
Revealed in a financial statement for the first 15 weeks of the second half of the financial year, total sales at W H Smith decreased 1% while like-for-like sales sank by 3% compared with last year.
The travel stores again outperformed the company’s high street arm, raising total sales by 1%, while like-for-likes were down 3%. In its high street business by contrast, total sales fell by 3% while like-for-like sales sunk by 4% in the period, compared with the same time frame in 2011.
In its travel arm, WHS reported that: “Our new store opening programme continues to progress well” as the company continues to grow gross margin while it tightly manages its costs.
It added: “We confirm that our financial position is in line with market expectations and our balance sheet remains strong. We continue to generate high levels of cash from our operations.”
As for its future prospects, the company said: “The economic environment remains uncertain and whilst we continue to be cautious about consumer spending, we remain confident in the outcome for the full year.”
Retail analyst Nick Bubb drew attention to the fact that WHS continues its record of growing gross margin and profit despite falling sales. He said: “It's déjà vu all over again at W H Smith today, because you just know that the IMS will say, yes, sales down, margins up and profits on track...In fact, I suspect that the statement is, word for word, exactly the same as this time last year: 'Whilst we continue to be cautious about consumer spending, we remain confident in the outcome for the full year'."
To 13th June 2012, WHS purchased 6.8m shares and returned £36m of the £50m share buyback announced in August 2011 to shareholders.