Then came WH Smith, the British bookseller and stationer known for its bookshops and airport convenience stores — a huge blow. Its stock price plummeted 38%, signaling the market’s disappointment with the announcement. The company discussed a new profit outlook down from its North American business. This update disclosed a £30 million ($40.35 million) “overstatement” of the previously anticipated headline trading profit, resulting in a more than 65% drop.
Sue Doughty, WH Smith posted on a recent trading day. As a result, they’re forecasting their North America division to reach a headline trading profit of around £25 million for the financial year ending August 31, 2025. This figure is a dramatic drop from earlier market forecasts of about £55 million. The company has since explained this adjustment as a series of accounting errors, but those errors have now caused investors to sound alarm bells.
The profit overstatement has led to WH Smith needing to restate their profit expectations for the year. The company’s move to lower its guidance by 40% from just a few months ago comes as all retailers are feeling the pinch in the North American market. This shift in sentiment has rattled the market, resulting in a quick plunge in investor sentiment and confidence.
WH Smith reiterated a commitment to transparency and accuracy in all financial reporting. The company is clearly under intense pressure, from all sides, to fix these problems and regain the trust of investors.
“WHSmith now expects Headline trading profit from the North America division for the financial year ending 31 August 2025 to be approximately £25m, down from previous market expectations of approximately £55m,” – WH Smith
As WH Smith continues to deal with this unfortunate circumstance, analysts will be watching closely to see how the company proceeds. The retailer can combat this by focusing on the immediate task at arm’s length—fixing its accounting. Further, it has to be aware of the long-term implications that this revision will have on its brand and competitive positioning.