WHSmith has slashed full-year forecasts for its US arm and called in an independent auditor after the UK retailer said it had discovered “an overstatement” in the unit’s trading profits.
According to the company, profits from the division for the year to August are now expected to reach £25m, down from market expectations of around £55m.
Full-year headline profit before tax and one-offs has also been lowered to roughly £110m.
The overstatement was “largely due to the accelerated recognition of supplier income,” WHSmith said, prompting the appointment of Deloitte to carry out an independent review.
The company plans to provide further details alongside its preliminary results, scheduled for November.
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WHSmith operates around 1,300 stores globally, primarily located in airports, train stations, and hospitals.
Earlier this year, the group sold its UK high street business to focus on its travel retail operations, with the brand continuing in its international outlets, including in the US.
The high street arm is now owned by investment group TG Jones, though the WHSmith brand remains in use across travel sites worldwide.
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