March 12, 2020 / 11:07 AM / in 23 days

Coronavirus hits sales at WH Smith's airport shops

LONDON (Reuters) - Sales at WH Smith’s (SMWH.L) stores in British airports have slumped by 35% as the coronavirus outbreak curbs travel, potentially denting its profit by up to 40 million pounds ($51 million) this year, the British retailer said.

FILE PHOTO: A company logo is pictured outside a branch of WH Smith in Manchester northern England, March 17, 2016. REUTERS/Phil Noble

Shares in the company fell to the lowest level since June 2016 on Thursday after it warned of the impact on both revenue and profit from the outbreak.

WH Smith’s airport and railway station stores have driven growth for the company by offsetting declining sales at its High Street stores.

Airlines globally have canceled flights to and from China, where the outbreak originated, and more recently to the other regions such as Italy.

U.S. President Donald Trump announced sweeping restrictions to travel from Europe to the United States on Wednesday.

WH Smith said airports in Asia Pacific, which account for about 5% of its travel division, had been significantly impacted since February.

Over the last two weeks it has also seen a material downturn in passengers in Britain, the United States and Europe, it said.

“For UK Travel, we expect revenue for the six months (to end-August) to be down approximately 15% on expectations which include airports, our most affected channel, down 35% in March and April,” the company said.

It said revenue in the United States and the rest of its international business was expected to be about 20% lower than expectations.

As a result it currently estimates an adverse impact on its top line of between 100 million and 130 million pounds for the year to end-August and between 30 million and 40 million pounds on underlying pre-tax profit.

The company said like-for-like revenue in the six months to end-February fell 1%, while total revenue rose 7%, and as a result it was confident profit for the first half would be in line with market expectations.

Reporting by Paul Sandle; Editing by Sarah Young and Jan Harvey

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