WH Smith squeezing margin growth despite sales declines

13th Jun 2013 07:38

Retailer WH Smith saw sales continue to slide as it began the second half of its financial year despite the continuation of its store-opening programme. Total group sales at the stationary-to-books-to-cigarattes retailer fell 5.0% in the 14 weeks since 1st March. Like-for-like (LFL) sales were down 6.0% compared to the same period last year, worse than the 5.0% decline in the first half of the year. However, WH Smith increased gross margins at both its Travel and High Street segments as tight cost control was maintained in the fact of LFL sales falls. WHSmith Travel total sales were flat and LFL sales were down 4.0% in the period, while High Street total sales were down 8.0% and LFL sales were down 7.0%. The group said the new store opening programme in the Travel segment, both in the UK train stations and airports and internationally, continued to progress well. The balance sheet remained robust, a trading update revealed, thanks to high levels of cash generated from operations. As of June 12th, the group had returned £34m to shareholders out of its planned £50m share buyback scheme.A recent survey from consumer group Which? saw WH Smith shops receiving the lowest customer service rating in a UK league table of customer satisfaction. On future prospects the group said: "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."Shares in WH Smith opened flat at 731p by 08:10 on Thursday. OH