WH Smith reported a 30% decrease in annual underlying pre-tax profits to £76 million for the year ending August 31, 2026. The company concurrently announced a "fundamental reset" intended to address high organizational costs and loss-making locations. On a statutory basis, the retailer recorded a pre-tax loss of £107 million, compared with a £2 million profit the previous year, following £164 million in impairments and restructuring charges.
The financial results follow a period of transition for the retailer, which sold its UK high street business to private equity firm Modella Capital in 2025. Executive chairman Leo Quinn, who assumed his role in April 2026, stated that previous strategies of "forced growth" created a complex structure that lacked scalable benefits. This report comes amid an ongoing investigation by the Financial Conduct Authority (FCA) into an accounting error in the company’s U.S. division that occurred late last year.
Under the new strategy, WH Smith plans to scale back its international footprint to focus on three primary markets: Ireland, Spain, and Australia. The company spent £41 million on these restructuring efforts over the past financial year, which included an overhaul of its U.S. store base. Despite the profit decline, the company reported that like-for-like revenues rose by 2%. Following the announcement on Thursday, November 12, company shares fell by 7% in morning trading.
For those tracking the company's retail presence, the most concrete change involves the narrowing of international operations. Markets outside of the U.S., Ireland, Spain, and Australia will see the brand withdraw or scale back as the company moves away from its previous "forced growth" model. The company's pivot to focus on travel hubs—such as airports and train stations—following the sale of its UK high street shops means its future performance is now tied more closely to global travel volume than to general consumer spending on the high street.
The next steps for the company include meeting its projected underlying pre-tax profit target of £75 million to £85 million for the 2026-27 fiscal year. Investors and regulators will be monitoring the progress of the Financial Conduct Authority investigation into the U.S. accounting error, the resolution of which has no confirmed date. The company stated it is planning cautiously for the upcoming year due to ongoing macroeconomic uncertainty.