NEWSAGENT and books retailer WH Smith has seen a drop in sales at its high street stores but said margins were improving as it kept a lid on costs.
The firm said like-for-like sales across its 620-strong chain fell 7 per cent in the 14 weeks to 8 June, which it blamed on tough comparisons against last year’s strong book publishing market when erotic novel Fifty Shades of Grey boosted sales.
At its travel stores division, which has more than 640 branches in airports and train stations around the world, like-for-like sales dipped 4 per cent.
However, in the last trading statement overseen by outgoing chief executive Kate Swann before she retires at the end of the month, WH Smith said its balance sheet remains strong and it continues to generate “high levels of cash” from its operations.
“The economic environment remains uncertain and whilst we continue to be cautious about consumer spending, we remain confident in the outcome for the full year,” the company said.
Kate Calvert, an analyst at brokerage Cantor, said that with a 4.1 per cent yield the shares were attractive and has a price target of 900p.
“We believe the company is entering an interesting development period,” she added.
Shares in WH Smith, which have risen by 50 per cent over the past year, closed down 17p at 714p.