Retailer WH Smith announced on Wednesday, September 16, 2026, that its annual underlying pre-tax profits are expected to be approximately £75 million for the year ending August 31. This figure sits at the bottom of the company's previously revised forecast of £75 million to £90 million and represents a decline from the £108 million in underlying profits reported for the 2024-25 fiscal year.
The company stated the updated outlook was due to lower trading profit margins caused by increased promotional activity, reduced brand marketing, and inflationary pressures. This announcement follows a restructuring period for the retailer, which sold its UK high street locations to private equity firm Modella Capital last year to focus on shops in hospitals and travel hubs such as airports and rail stations.
WH Smith reported that total like-for-like sales rose 2%, supported by a 4% revenue growth in the UK during the final quarter. Airport sales in the UK increased by 2% as passenger numbers rose during the summer peak, recovering from a 2% decline in the previous quarter attributed to travel disruptions from the Iran war. However, North American same-store revenues remained flat for the year following a 3% decrease in the final three months.
The company is currently under investigation by the Financial Conduct Authority (FCA), the UK's financial services regulator, regarding accounting issues in its North American division. The Financial Reporting Council, the UK's accountancy watchdog, also launched an investigation in June into PwC's auditing of the firm. These actions follow a report by Deloitte that confirmed shortcomings in the US audit process, leading to the resignation of former chief executive Carl Cowling in November 2025.
For the company's workforce and operations, the shift in profit margins and the ongoing "transformation agenda" involve targeted cost-cutting measures. While specific job reduction numbers were not reported, the company noted it is "reining in" costs while investing in travel essentials. The 8% jump in hospital site sales and 4% rise in rail station revenues indicate a shift in where consumers encounter the brand, moving away from traditional high streets toward captive audience locations in the UK.
The broader impact involves the precedent set by the ongoing regulatory investigations by the FCA and the accountancy watchdog. The admission that North American profits were overstated by as much as £50 million has placed the company's financial reporting under scrutiny. Future policy for the firm will likely be shaped by the outcomes of these investigations and the continued volatility of global travel markets. WH Smith has not yet announced a specific date for the release of its final audited results for the year ending August 31.