“Our strongest-ever position as a global travel retailer” – WHSmith CEO lauds H1 performance

UK. WHSmith Group today posted an +8% (+9% constant currency) year-on-year increase in first-half revenues to £926 million (US$1.16 billion),

“The Group is in its strongest-ever position as a global travel retailer,” said WHSmith Group Chief Executive Carl Cowling in reference to the Travel division’s stand-out performance.

“We have had a good first half and our businesses are well-positioned for the peak summer trading period. Total Travel revenue is up +13%. The Board is today announcing an interim dividend of 11.0p, reflecting current trading and the significant medium and long-term prospects for our global travel business.”

Notably, Travel delivered strong results across all markets, with total year-on-year revenue of £670 million (US$839), an increase of +13% (+15% constant currency, +10% like-for-like).

The results were bolstered by strong performances in all three Travel divisions, with overall sales in the UK up by +15% (+15% constant currency, 13% like-for-like), North America by +7% (+13% constant currency) and the Rest of the World up by +19% (+24% constant currency, +12% like-for-like).

Revenue from the high street business within the half-year period was up +4% (constant currency), reaching £256 million (US$320 million), with store like-for-like sales up by +1% during the busy Christmas travel period.

WHSmith’s total Travel revenue during the seven-week period to 20 April jumped by +9% year-on-year on a constant currency basis, with all three divisions contributing positively.

Lower growth rates were, however, registered in the second half to date, as expected, with the company annualising the strong passenger recovery in the second half of 2023.

The group said it is well-positioned for the peak summer trading period and on track to deliver full-year expectations.

Cowling added: “Our Travel divisions are trading well and I am particularly pleased with the outstanding performance from our UK Travel business, which has seen a +19% increase in trading profit. We continue to make excellent progress in this division, growing our space and broadening our categories as we transition to a one-stop shop for travel essentials.

“In North America, it has been a very active period where we have opened a further 13 stores. We have also now fully integrated InMotion into our core airport business. This will allow us to sell tech accessories more effectively across our North American airport estate and generate operational efficiencies.

“None of this would be possible without the exceptional efforts of the entire team and I am extremely grateful for their ongoing commitment and hard work.”

WHSmith attributes the Travel growth to an array of initiatives including a flurry of store openings. During the six months, the group launched 53 stores and won 31 additional locations. The company said it has over 80 stores in the pipeline, all due to open over the next three years.

The company noted it benefitted from increasing average transaction value and spend per passenger. WHSmith said: “We continue to see strong momentum across all our markets as we benefit from growing passenger numbers. We also see further growth ahead from increasing our spend per passenger and average transaction value, expanding our categories, and expanding our space by continuing to win new stores across the globe utilising our broad suite of brands.”

In the UK, the company noted its transformation from a news, books and convenience retailer to a one-stop shop for travel essentials is “progressing very well”. One-stop shops are delivering good results, WHSmith added.

In North America the change in growth rate is attributable to the timing of the store opening programme.

WHSmith opened additional 13 stores in the period, increasing its market share and enhancing the quality of its space. These included openings at Salt Lake City, Nashville, Boston Logan, New York La Guardia, Denver, Chicago O’Hare, Washington Ronald Reagan, Las Vegas and Los Angeles airports.

The retailer said: “Early results are good, and customer and landlord feedback has been positive. During the period, we also closed 11 stores, consistent with our strategy of improving the quality of our store estate.”

During the half-year period, the company combined its core Marshall Retail Group airport business with InMotion. The combined businesses now account for 75% of the revenue for the North American division.

In the rest of the world, the retailer opened 35 stores during the half-year period, including in Australia, Spain and Sweden. It also recently opened a 269sq m flagship store at Budapest Airport, a new market for WHSmith. The company plans to open a further 16 stores in this financial year.

Cowling added: “The second half of the financial year has started well, and we are on track to deliver full-year expectations. We are confident that 2024 will be another year of significant progress for the Group.” ✈