Strong Christmas boosts WH Smith's full-year forecast
By Aastha Agnihotri
(Reuters) - British books, newspaper and stationery retailer WH Smith Plc sees full-year profit "slightly ahead" of expectations after a strong sales performance at its High Street business over the Christmas period.
Shares in WH Smith, which has over 1,300 stores, primarily in the UK, rose as much as 6.5 percent to 1692 pence, one of the biggest gainers on the FTSE 250 midcap index <.FTMC>.
The 224-year-old group said growth at its High Street business was driven by the recent trend towards 'colour therapy', including colouring books for adults.
The 'colour therapy' trend is picking up in the UK as more and more customers look to de-stress and spend time away from their mobile phones and tablet screens.
WH Smith's High Street stores, which sell stationery, magazines, confectionery and books from over 600 outlets, reported flat like-for-like sales, with total sales down 1 percent over the 20 weeks to Jan 16.
However, their performance over the Christmas period was better, with like-for-like sales up 2 percent over the 5 week period to Jan 2.
"I cannot remember the last time I saw a positive like-for-like sales figure for the High Street division ...so that's an indication of breaking the trend," Canaccord Genuity analyst David Jeary told Reuters.
Jeary, however, cautioned that it would be too early to conclude that the company's High Street business had recovered, based on its Christmas performance.
With shopping habits in the UK changing, and more and more consumers going online, high street sales have taken a hit over the Christmas period.
Marks & Spencer reported dire trading in clothing and gifts over Christmas, partly blaming unseasonably warm winter weather, while much of department stores group John Lewis's better performance came online rather than in stores.
WH Smith said like-for-like sales were up 2 percent in the 20 weeks to Jan. 16, with total sales rising 4 percent.
Total sales at its travel arm, comprising outlets at airports, railways stations, motorway services, hospitals and workplaces, rose 12 percent, helped by improving passenger trends.
Shares in the company were up 6.4 percent at 1690 pence at 0845 GMT on the London Stock Exchange.
(Reporting by Aastha Agnihotri in Bengaluru; Editing by Sunil Nair)
