Shares of WH Smith declined to their lowest level in 17 years amid rising operational costs and increased promotional activity, which have weighed on the company’s profits. The British retailer, which has recently emphasized growth in its travel division, reported that these factors have contributed to a significant earnings decline for the fiscal year.

WH Smith is now projecting an annual profit of approximately £75 million, down from the £108 million it recorded in the 2024-25 financial year. This decrease reflects challenges tied to higher expenses and the ongoing impact of external disruptions, including turmoil in the Middle East that has affected certain supply chains. Additionally, the company has been contending with the repercussions of a US accounting error that added further pressure on its financial performance.

Despite the initial drop in share value during trading, WH Smith’s stock recovered later in the session, closing 1.6 pence higher at 364.4 pence per share. The company’s strategic pivot toward its travel operations, which include outlets at airports and railway stations, had been seen as a potential growth avenue, but rising costs and market volatility have hindered its progress.

WH Smith’s management will likely be scrutinizing steps to mitigate cost inflation and navigate global uncertainties to stabilize profitability in upcoming reports.