April 23 (Reuters) - Travel retailer WH Smith on Thursday suspended its dividend in a bid to reduce debt and secure its financial position. The retailer said it had noted a negative impact on
UK's WH Smith warns on profit, halts dividend as Iran war hits travel
WH Smith's Financial Update Amid Global Travel Disruptions
By Prerna Bedi
April 23 (Reuters) - Britain's WH Smith cut its annual profit forecast and suspended its dividend on Thursday, sending its shares down as much as 17% as the travel retailer warned the Iran war was hitting air travel and consumer spending.
Impact of Iran War on Travel and Consumer Spending
The war has rocked global travel, leading to flight cancellations, diversions, higher jet fuel prices and general concerns about rising inflation, resulting in lower passenger numbers and spending at airports.
WH Smith's Business Model and Exposure
WH Smith, which has outlets in airports and train stations that sell everything from sandwiches and crisps to headphones, said it did not expect any immediate recovery in passenger spending and numbers which had fallen since the war began.
That was despite like-for-like sales rising 2% in the first seven weeks of the second half of its financial year which coincided with the start of the war.
Trends in Passenger Spending
CFO Max Izzard told analysts the company had noted a fall in average basket size, or spend per passenger, as fewer long-haul flights impacted sales of certain products. He cited neck pillows as an example of items typically bought by passengers on longer journeys.
WH Smith did not disclose its average basket size but said average spend per passenger in its UK Air business, its largest market, rose 4% over the full 2025 financial year.
Financial Outlook and Market Reaction
'VALUED WITH CAUTION'
WH Smith now expects full-year headline profit before tax and non-underlying items of 90 million pounds to 105 million pounds ($121 million to $142 million), down from a previous estimate of 100 million pounds to 115 million pounds.
"Short term, they are likely to be valued with caution in mind," Peel Hunt analysts said.
Investor Concerns and Regulatory Scrutiny
The update adds to investor concerns over the more than 230-year-old retailer after it said in August it had uncovered inflated earnings at its North American business, prompting a CEO exit and a probe by Britain's financial regulator.
WH Smith said on Thursday that it continues to cooperate with the watchdog.
Its shares, which slumped to a one-month low of 521.5 pence, were trading down nearly 11% as of 0918 GMT.
Additional Information
($1 = 0.7413 pounds)
(Reporting by Prerna Bedi in Bengaluru. Writing by Pushkala Aripaka. Editing by Sonia Cheema, Mark Potter and Louise Heavens)
