High street stalwart WH Smith shrugged off a tenth successive year of falling Christmas sales yesterday as it highlighted a “good profit performance” driven by a continued squeeze on costs.
Like-for-like sales were down 4 per cent for the 20 weeks to 18 January. They have been consistently negative for this period since 2005 but the retailer’s strategy of focusing instead on margins is admired by City analysts.
Its 615 high street stores saw a fall of 6 per cent but the group said there was good margin improvement and costs were tightly managed.
In the retailer’s travel division, which has 673 units at airports, railway stations and motorway services, like-for-like sales were down 1 per cent, again with margin improvement, and a store opening programme is progressing well.
The firm said it had identified further opportunities for growth in both the UK and abroad.
It also began to deliver on its pledge of returning £50 million of cash to investors, buying 1.6 million shares at an average price of £9.57 – after last year reporting annual profits up 6 per cent to £108m.
Chief executive Stephen Clarke said: “During the period we have delivered another good profit performance across the group with costs tightly controlled and further improvement in gross margin.
“Looking ahead, we continue to plan cautiously and manage the business tightly while investing in new opportunities for future growth. We are confident in making further progress in the year.”
Analysts at Cantor Fitzgerald Stockbrokers yesterday stuck
by their forecast for profits of just below £110m in the current financial year.