WH Smith's shares have continued to fall, with a slump of over eight per cent in early trading on Friday, reaching 364p. This follows initial losses on Thursday, bringing the total share price decline to approximately 14 per cent since the group announced a drop in profit. Year-to-date losses for the stock now stand at 41 per cent.
The retailer reported a pre-tax profit of £76m for the year ending August, which is more than a quarter lower than the previous year and below its initial target of £115m. On a statutory basis, the group recorded a £107m loss, a shift from a £2m profit last year, attributed to £164m in impairments, write-downs, and restructuring costs.
CEO Leo Quinn, who took over in April, attributed the company's difficulties to "forced growth" under previous management, which he stated led to a complex structure, increased costs, and too many loss-making stores. Quinn's turnaround plan, partially funded by £106m raised from investors in June, includes scaling back underperforming operations in Europe and the US, and suspending all bonuses for staff and senior leadership.
The group anticipates a decline of 10 to 20 per cent in revenues from its rest of the world division due to store closures. North American takings are also expected to slow, as airport stores in this division face lower footfall due to travel disruption caused by the Iran war. WH Smith is also still recovering from an accounting error discovered last year, which involved overstating profits in its North American division.