WH Smith Issues Profit Warning Due to Iran War Impact on US Airport Traffic

WH Smith has warned of a profit decline as foot traffic at its airport locations in the US has dropped, attributed to the ongoing conflict in the Middle East. To bolster its financial position, the retailer raised £102m via a share sale, aiming to reduce debt, invest in technology, and close unprofitable outlets. For the seven weeks ending 6 June, revenue from US airport operations decreased by 2% compared to the previous year, following similar trends in the UK. The company now anticipates pre-tax profits between £75m and £90m, a reduction from earlier estimates of £90m to £105m. Shares plummeted nearly 20% to 394.8p, marking their lowest point since 2010, and closed down 16.2% at 412.6p. Additionally, WH Smith will record a £150m non-cash impairment charge and plans to shut some stores in Europe and North American resorts. The firm is also grappling with an accounting scandal in its North American division, where profits were inflated by as much as £50m, resulting in CEO Carl Cowling's resignation and a £600m decrease in market value. Investigations into PwC's auditing of WH Smith's 2024 financial statements are being conducted by the Financial Reporting Council, alongside a probe by the Financial Conduct Authority.