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WH Smith Shares Slide as Challenging Market Conditions Prompt Outlook Cut

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WH Smith Shares Slide as Challenging Market Conditions Prompt Outlook Cut

WH Smith (SMWH.L) shares fell sharply in early Wednesday trading in London after the travel retailer lowered its fiscal 2026 profit outlook, citing weaker consumer spending, an expected decline in passenger traffic and margin pressures stemming from uncertainty surrounding the Middle East conflict.

The British travel retailer reduced its expectations for 2026 headline group profit before tax and non-underlying items to a range of 75 million pounds sterling to 90 million pounds, compared with its previously provided range of 90 million pounds to 105 million pounds.

The stock plunged more than 18% after the revised outlook was announced.

In its fiscal third-quarter trading update, the company cited the ongoing geopolitical uncertainty in the Middle East, a recent deterioration in its North America division, and pressures on its gross margins as reasons for the outlook change. Management added it does not expect consumer confidence to recover in the near term or jet fuel prices to stabilize.

The retailer also expects to record a significant non-underlying non-cash impairment charge of up to 150 million pounds for fiscal 2026 related to its store exit program and restructuring in North America.

To mitigate the impact of the challenging market conditions, the company on the same day announced plans to raise fresh capital through the issuance of 26 million new shares under a share placement, a subscription offer and a retail offering.

"There is no doubt that current economic uncertainty and its effect on consumer appetite for spending has created headwinds. In this environment, sorting legacy issues while investing in the core model requires the financial flexibility of a stronger balance sheet in lock-step with self-help," said WH Smith Executive Chair Leo Quinn. "This placing is a prudent and proactive step to accelerate our transformation of what is, at heart, a good business with some great people and clear opportunity for profitable growth."

For the 14 weeks ended June 6, the company recorded a 5% year-over-year increase in its total revenue on a constant currency basis.

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