British retailer WH Smith said its annual revenue jumped 28%, boosted by strong demand during a busy summer travel season, but fell short of a recently raised profit forecast.
Leisure travel demand has been robust since the pandemic restrictions ended, with the sector witnessing a global boom during the summer holiday season. However, high costs and a squeeze on passenger spending as the economy stumbles continue to weigh on the sector.
The "lack of upgrade" to its earnings forecast has disappointed the market, according to Jonathan Pritchard, an analyst at Peel Hunt.
Shares of the company, which has stores in travel centres and which sells everything from books and sandwiches to Bluetooth headphones, fell as much as 6% to 1,395 pence in early trade.
In May, WH Smith had forecasted higher full-year profit, buoyed by a recovery in passenger numbers in all its key markets.
For the year, analysts on average expect profit before tax to be at £143 million (€167.4 million), according to a company compiled analyst consensus.
'We believe WH Smith's forensic approach to retailing should stand it in good stead to expand successfully in the global travel essential retail segment,' analysts at RBC Capital Markets said in a note.
WH Smith, which will report its preliminary annual results on 9 November, said it expected to open over 80 new stores across its travel businesses in the financial year ending August 2024.
It was among the more than 200 companies in Britain that were fined in June of this year for failing to pay their lowest paid staff the minimum wage between 2017 and 2019.