WH Smith boosts margins despite sales falling in snow
Even WH Smith, widely regarded as one of the best-run retailers in Britain, could not shrug off the Christmas snow.
Today it revealed that sales in the two months to January 22 were down 4%, while like-for-like sales, which strip out the effect of new store space, fell an even worse 7%.
But Kate Swann, the chief executive who could earn herself £8 million in the next three years if she meets targets set by the board, says she offset the fall in sales by increasing margins.
Like-for-like sales are always likely to fall at Smiths as it shifts its product mix away from entertainment items such as CDs to concentrate on chocolate and magazines.
At railway stations, airports and other travel hubs, the company reported a 3% decline in the 21 weeks to the same date.
Swann said: "Our staff worked extremely hard during this period to maintain the best possible service for our customers."
Nick Bubb at Arden Partners reckons a fair price for WH Smith shares is 550p. Today they moved up 5p to 485.8p, leaving the company valued at £714 million.
"The resilient Christmas profit performance shows that the business was not blown off course by the snow and the obvious contrast is with the struggling HMV," Bubb said. "Good retailers don't moan about the weather."
