WH Smith shares were down 30% in early trading on Thursday after the group announced a sharp reduction in group full-year profit expectations.
WH Smith has slashed its profit expectations for North America by £30m following a financial review that uncovered accounting irregularities.
The travel retailer now expects headline trading profit from its North America division to reach approximately £25m for the year ending 31 August 2025. This represents a dramatic fall from previous market expectations of around £55m.
The overstatement stems largely from the premature recognition of supplier income within the North America operation. WH Smith’s board has commissioned Deloitte to conduct an independent review of the issues.
The revision means the group’s full-year headline profit before tax will be around £110m. Further details will be provided when WH Smith announces its preliminary results.
WH Smith reported £160m headline profit before tax for the year ended August 2024, and investors are bitterly disappointed they are staring down the barrel of PBT coming in a third less in 2025.
The fact that the profit warning is largely down to an own goal will make the news even more painful.
WH Smith shares are now trading at less than half of their 2023 high.