Following today’s release of WH Smith’s figures for the 21 weeks ending 25th January 2025; Tash Van Boxel, retail analyst at GlobalData, a leading data and analytics company, offers her view: “WH Smith has started FY2024/25 on a weaker footing, with group revenue rising 3% year-on-year and on a like-for-like (l-f-l) basis. Though this growth is softer than the previous financial year, this is still an impressive uplift given that it continues to report a revenue uplift on two years of strong growth (up 8% and 41% in the last two comparative years), and WH Smith should be commended for maintaining this momentum. Total revenue was propped up by its travel fascia, with its total travel division growing 7%. However, the high street arm continued to decline, with revenue down 6% as the group focused on reducing costs. This comes as WH Smith has announced it is looking at strategic options for its high street fascia, including the potential sale of this business to direct its full attention to its flourishing travel division, which has more room for growth.
“WH Smith’s largest division, UK travel, grew 7% this period. Its air travel hubs, which were up 9%, and hospitals, which were up 8%, drove this performance. While high footfall supported this result, its UK air division performed particularly well, with revenue growth ahead of passenger numbers, indicating consumers were spending more in these locations. WH Smith’s investments in its offer are paying off, with consumers responding positively to its extended food and health & beauty ranges. Though WH Smith has not opened new stores during this period, as it focuses on the quality of its store estate instead of size, strong l-f-l performance indicates that its offer resonated with shoppers in its existing locations. WH Smith must not get comfortable with this consistently strong performance, and it must add to its proposition to strengthen its position as a one-stop shop for travel essentials. An increased health & beauty offering will put the retailer in good stead to capitalise on demand, with this sector forecast to be the fastest growing sector in 2025, up 3.9% for the year.
“The high street fascia has continued to decline, with revenue falling 6% and l-f-l revenue down 3%. The group did not mention the Toys “R” Us shop-in-shops, which should have brought in Christmas shoppers and bolstered growth for WH Smith. These lacklustre results may be due to a weak demand for toys & games over the festive period. Indeed, the proportion of Christmas shoppers purchasing the category as gifts was down 1.9ppts to 27.8%, according to GlobalData’s Christmas 2024 report. However, WH Smith stated that it has ended the trading period with a clean stock position and is on track to deliver FY cost savings of £11m, as it focuses on bolstering the appeal of its high street arm to potential buyers.”
