Summary
WHSmith's shares dropped by 38% due to an accounting mistake that overstated profits in North America. The company has adjusted its profit forecasts and is conducting a review to address the error. WHSmith operates mainly as a travel retailer after selling its UK high street division.
Key Facts
- WHSmith's shares fell 38% after announcing an accounting error.
- The error involved early recording of supplier income, causing profit overstatements.
- The company's predicted North American profits dropped from £55 million to £25 million for the year.
- WHSmith revised its expected annual pre-tax profits to about £110 million.
- The company has asked Deloitte to review the situation.
- WHSmith sold its UK high street operation to focus on travel retailing.
- Experts say the error is embarrassing and raises concerns about the company's future.
- WHSmith stores are now found mainly in places like airports and railway stations.
