Smith set for sharp fall in profits amid cost and trading pressures | LBC

WH Smith said profits are set to fall sharply, now forecasting annual underlying pre-tax profit of around £75 million for the year to August 31, down from £108 million in 2024-25. The retailer expects results to land at the bottom of forecasts after a sequence of downgrades, coming only months after a £100 million investor cash call. It attributed the outlook to lower trading profit margins driven by increased promotional activity, reduced brand marketing and inflation headwinds. The group also faces an accounting legacy: it previously admitted overstating North American profits by up to £50 million due to audit issues, and it remains under Financial Conduct Authority investigation. Trading updates showed like-for-like sales up 2%, with airport sales recovering after earlier travel disruption linked to the Iran war.