International airport retailer WHSmith has issued a profit warning after sales in key markets in the UK and the United States were lower than expected in the 14 weeks up to June 6. WHSmith is now planning to raise more money by issuing an additional 26 million new ordinary shares in the company.
In a statement released on Wednesday, WHSmith blamed the Middle East security situation and rising airfares for falling passenger numbers in its growing US air division, leading to a 2% drop in like-for-like sales in the last seven weeks.
WHSmith also runs a resort division in the United States, although this has taken a financial hit in recent months. Like-for-like revenue plummeted 7%, which the company attributed to a drop in the number of people visiting Las Vegas.
To address underperformance in Las Vegas, the company has already decided to close 14 unprofitable fashion stores, and intends to close the remaining 12 fashion stores by the end of the year. WHSmith’s ‘Welcome to Las Vegas’ gift store division could also be sold, as the company reassesses its presence in the city.
Founded 234 years ago in London, WHSmith started its life as a news vendor and transformed itself into a major brand name across the UK. In recent years, WHSmith started to focus on its more profitable travel retail business, eventually divesting its High Street business, which was rebranded as TGJones.
WHSmith has grown considerably in British and North American airports, although recent pressures on air travel are also having a knock-on effect.
“As a result of a softening in consumer demand, further promotional activity has been and will be required,” the company warned of its US air division on Wednesday.
“Given the ongoing uncertainty from the Middle East conflict and pressures on gross margins, including the recent deterioration in the North America division, the Group expects to deliver FY26 Headline Group profit before tax and non-underlying items of £75m – £90m,” the statement continued.
“The Group assumes no near-term improvement in consumer confidence, and that jet fuel supplies can be maintained.”
