WH Smith profits on target

26th Jan 2011 07:38

Newsagent WH Smith's high street stores were hit by tough trading conditions and the winter freeze, but profits met forecasts and gross margin is ahead of plan.In what the newspaper, books and stationery retailer called a "resilient" performance, total sales for the 21 weeks to 22 January fell 4% and were down 5% on a like for like basis.The high street business struggled through last month's snow and ice, but like for like sales dropped a bigger than expected 7% for the eight weeks to last Saturday and 6% for the period since the end of August. Strip out entertainment and the declines are a more modest 3%.Smith said the numbers reflect its aim of rebalancing the mix of its business towards core categories and "challenging" Christmas trade.But gross margin improved ahead of expectations and costs are being "tightly managed" to reflect the trading conditions. The travel division registered flat total sales and a 3% slip on a like for like basis for the 21 weeks, with gross margin improving ahead of expectations. The unit outperformed despite the disruption caused by the weather and impact on passenger numbers."Looking ahead, we expect the trading environment to remain challenging and we have planned accordingly," chief executive Kate Swann said.