It was always going to be hard for the high street staple to match its record-breaking 2017, one that saw the stock close out the year at an all-time peak of £23.46. Yet the company will not doubt be disappointed with 2018 has gone so far.
The firm really struggled across the first quarter and a bit, finding itself at a 7-ish month low of £18.60 by mid-April after revealing a 1% decline in half year pre-tax profit to £82 million. It managed to rally back to £21.43 by early June, aided by the company’s third quarter results, only to slide to £19 towards the end of July. WH Smith now sits at a current trading price of £20.23.
The company’s last update was that aforementioned Q3 statement in June. It was pretty much business as usual: total group sales rose a solid 4%, with like-for-likes rising 1% year-on-year. As ever the Travel business was the shining star, with total sales in the division surging 8% with a 3% jump in LFLs. Just as predictably the High Street sector struggled, though a 1% decline in both total and comparable sales is a big improvement on the 5% and 4% drops seen for the first half of the year.
In terms of Thursday’s fourth quarter release, investors might be looking for an even better sales figure from the Travel division given that:
- It is holiday season.
- The company mentioned back in June that it would be opening the 8 units recently won in Madrid Airport over the summer.
Another High Street performance in line with what was seen in Q3 would also be welcome.
WH Smith (LON:SMWH) has a consensus rating of ‘Buy’ alongside an average target price of £21.39.
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