Travel Retailer WHSmith Loses Credibility As Shares Collapse By 34%
The post Travel Retailer WHSmith Loses Credibility As Shares Collapse By 34% appeared on BitcoinEthereumNews.com. One of WHSmith’s retail concepts at London Gatwick Airport. Kevin Rozario Last week’s spectacular collapse of 34% in the share price of travel retailer WHSmith was a warning that investors—who currently see good options for returns—are taking a hard line when it comes to data inaccuracies from potential stock picks. British-based WHSmith, which operates more than 1,700 travel retail stores across 30 countries worldwide, made a colossal blunder when it overstated its headline annual trading profit forecast in North America, a region on which the company has placed great emphasis. Last Thursday, the company more than halved the projected figure from £55 million ($74.4 million) to approximately £25 million ($33.8 million), lopping off $40 million. The company’s financial year ends on August 31. A financial review in preparation for the retailer’s year-end results identified the error, and in revised guidance, WHSmith said: “This overstatement is largely due to the accelerated recognition of supplier income in the North America division.” The company explained that it receives supplier income in the form of supplier incentives and discounts. “These incomes are recognized as a deduction from cost of sales on an accrual basis as they are earned for each supplier contract,” the statement said. The impact on the group’s headline profit before tax and non-underlying items is also substantial. For the full year, WHSmith is forecasting it to be in the region of £110 million, versus £166 million in the 2023/24 financial year. The retailer’s board has instructed Deloitte to run an independent review. WHSmith’s stock opened the week on Monday at £10.71 and closed on Friday at £7.11. Most of the collapse took place on Thursday, with an 11% recovery the next day, but leaving the shares languishing at a price not seen since early 2013. North America is core to WHSmith…
The post Travel Retailer WHSmith Loses Credibility As Shares Collapse By 34% appeared on BitcoinEthereumNews.com.
One of WHSmith’s retail concepts at London Gatwick Airport. Kevin Rozario Last week’s spectacular collapse of 34% in the share price of travel retailer WHSmith was a warning that investors—who currently see good options for returns—are taking a hard line when it comes to data inaccuracies from potential stock picks. British-based WHSmith, which operates more than 1,700 travel retail stores across 30 countries worldwide, made a colossal blunder when it overstated its headline annual trading profit forecast in North America, a region on which the company has placed great emphasis. Last Thursday, the company more than halved the projected figure from £55 million ($74.4 million) to approximately £25 million ($33.8 million), lopping off $40 million. The company’s financial year ends on August 31. A financial review in preparation for the retailer’s year-end results identified the error, and in revised guidance, WHSmith said: “This overstatement is largely due to the accelerated recognition of supplier income in the North America division.” The company explained that it receives supplier income in the form of supplier incentives and discounts. “These incomes are recognized as a deduction from cost of sales on an accrual basis as they are earned for each supplier contract,” the statement said. The impact on the group’s headline profit before tax and non-underlying items is also substantial. For the full year, WHSmith is forecasting it to be in the region of £110 million, versus £166 million in the 2023/24 financial year. The retailer’s board has instructed Deloitte to run an independent review. WHSmith’s stock opened the week on Monday at £10.71 and closed on Friday at £7.11. Most of the collapse took place on Thursday, with an 11% recovery the next day, but leaving the shares languishing at a price not seen since early 2013. North America is core to WHSmith…
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