WH Smith Profit Falls 29.6% as Travel Reset Gets Underway

WH Smith's headline pre-tax profit fell 29.6% to £76m for the 12 months ending 31 August 2026, even as the retailer held revenue steady through a turbulent year. The figures come from GlobalData retail analyst Elliot Rickerby, who assessed the results after their release today.

"WH Smith has reported a resilient performance given a turbulent 12 months that included an accounting scandal in North America, the departure of its CEO and a string of profit warnings," Rickerby said. "However, while revenue held up, this resilience has yet to translate into profit."

Like-for-like growth slowed to 2% from 5% a year earlier. Shares fell roughly 8% in early morning trading. With like-for-like revenue flat in the first 10 weeks of FY2026/27 and profit guidance of £75m–£85m, Rickerby said a meaningful recovery "still looks some way off."

What squeezed the margins?

UK airport contract renewals drove higher rents during the period, pulling the trading margin down from 10% to 8%. The Middle East conflict weighed on passenger numbers in the second half. Softer consumer sentiment forced heavier promotional activity.

Securing more than 80% of its UK Air contracts hurt margins now but should prove fruitful long term for a group focused solely on travel destinations, Rickerby said.

Not all pressures are external. New Executive Chair Leo Quinn has acknowledged that rapid expansion left the group with too many loss-making stores. A £103m equity raise in June is now funding a clean-up of the estate.

How did the UK perform?

UK revenue rose 4.3% to £870m. Headline trading profit fell 17.7%. The UK delivered the bulk of the group's £130m trading profit, but heavy store spending has yet to return material growth.

WH Smith spent recent years scaling food-to-go and health & beauty. It is now trimming ranges in both categories to cut waste and improve margins.

Hospitals were the standout channel, with revenue up 9%. Rickerby credited the strength of the multi-format offer and partnerships with brands such as Marks & Spencer and Costa Coffee. Rail rose just 3% despite record passenger journeys across Great Britain's rail network, a gap Rickerby attributed to the challenge of converting footfall into spend. Only a handful of stations, such as King's Cross and London Bridge, have so far been upgraded to the one-stop-shop format.

The estate is shrinking on purpose. WH Smith opened eight UK stores and closed 29, against the roughly 20 openings planned for 2026 announced at the end of last year. The shift reflects new leadership's preference for fewer, larger one-stop-shops. With the UK store estate expected to remain broadly stable heading into 2027, Rickerby said the true test will be driving growth through existing stores rather than expansion. Extending the one-stop-shop format across more of the estate, particularly in Rail, would be the clearest way to lift spend per passenger.

What happened internationally?

North America revenue rose 5.8% to £437m, up 9% in constant currency. Travel Essentials air formats led the growth, up 23% on a constant currency basis. As the division's most profitable format, its growing share of the estate is welcome — particularly as InMotion and Resorts locations continue to drag, with Resorts hit by falling visitor numbers in Las Vegas. Trading profit remained flat at £15m as transformation work and weaker passenger numbers took their toll.

Rest of the World revenue rose 3.9% to £318m, up 1% in constant currency, as WH Smith retreats from smaller markets such as the Netherlands, Sweden and Denmark in favor of franchising. The move requires less investment but will weigh on revenue: the group expects a 10–20% decline for the region next year.

The group remains, in Rickerby's words, "not fully out of the woods at this point," and the margin math of the UK Air contracts plus the rail conversion challenge will decide whether the £103m-funded reset pays off.