WH Smith shares soared on Wednesday after the retail group issued an encouraging trading update revealing further growth for its travel division.
The group enjoyed a 10% increase in travel sales in 2024, driving group revenue 7% higher. The UK travel unit enjoyed sales growth of 12% while the Rest of the World saw revenues surge 15%. North American sales ticked 6% higher.
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High street sales were 4% softer, but investors won’t care as the company no longer prioritises this area of the business amid a general reduction in footfall.
WH Smith shares were over 10% higher at the time of writing.
While the high street dies a slow, painful death, WH Smith has switched its focus to the captive travel market. In a travel setting, WH Smith charge a premium, and consumers have little or no other options at airports or train stations.
The strategy has been a complete success, and WH Smith is emerging as a travel-focused retailer largely unscathed by the destruction of the high street, which has sent so many into administration.
“It’s no secret amongst WHSmith shareholders that following the pandemic the retailer’s travel arm has more or less dominated the company’s earnings. The post-Covid travel boom encouraged WHSmith to double down on the sector, investing in more stores in airports, train stations and service stations across the UK, the US and around the globe,” said Mark Crouch, Market Analyst at investment platform eToro.
“This morning’s trading update reaffirms that case, as once again WHSmith’s travel business has played a dominant role for the company as peak summer travel demand boasted the retailers’ revenues and overall financial position, leading management to announce a $50m share buyback this morning.”
Investors, already happy with the strong progress in sales, will be delighted to learn WH Smith has announced a £50m share buyback today as part of their capital
On 14 November, WH Smith will release preliminary results for the year ending 31 August.