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A major consumer sector player, WH Smith has reported a strong performance for the fourth quarter, ending 31 August, prompting the retailer to reaffirm its full-year outlook and announce a £50 million share buyback. The company's shares saw a notable increase in early trading following the announcement.
Sales Growth and Division Performance
For the three-month period ending in August, WH Smith (OTC:WHTPF) achieved a 6% rise in group sales. On a like-for-like basis, sales increased by 4%. The UK travel division was a significant contributor to this growth, with underlying sales climbing 8%. This boost was driven by higher passenger traffic at airports and train stations.
The retailer also saw positive impacts from expanded product categories. Notable increases were observed in food and drink, health and beauty products, and technology items. In addition to strong domestic performance, travel sales abroad also showed growth. In North America, underlying sales were up by 1%, while sales in other international markets increased by 7%.
Despite these gains, high street sales experienced a decline of 3% on a like-for-like basis. Nonetheless, the overall strong performance in the travel division helped counterbalance this decline.
Share Buyback and Capital Allocation
WH Smith also unveiled a £50 million share buyback program. This move aligns with the company's capital allocation policy, which focuses on returning surplus cash to shareholders. The decision reflects WH Smith’s commitment to delivering value to its investors while maintaining a robust financial position.
