US EditionBritish retailer WH Smith plunges 38% after cutting U.S. forecast on accounting error
WH Smith revised its US trading profit forecast from £55 million to £25 million after discovering a £30 million accounting error involving premature supplier income recognition.
- Shares plunged 38% after WH Smith revealed an accounting error in its United States operations on Thursday, warning yearly profits would be lower.
- An internal finance review revealed North America trading profit was overstated by about 30 million due to early recognition of supplier income, prompting WH Smith to engage Deloitte for an audit review.
- The group now expects North America trading profit of about 25 million for the year to August, down from 55 million, and lowered annual pre-tax profit to around 110 million.
- Following the profit cut, analysts said the episode is a significant embarrassment for WH Smith after its British high-street sale earlier this year, with Dan Coatsworth calling it `nothing short of a disaster` and warning that `Investors will be sobbing into their cornflakes on the news`.
- With the firm's sale earlier this year, about 480 high-street shops were sold to Modella Capital, while about 1,300 travel locations worldwide remain operational under WH Smith.
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Total News Sources19
Leaning Left2Leaning Right2Center5Last UpdatedBias Distribution56% Center
Bias Distribution
- 56% of the sources are Center
56% Center
L 22%
C 56%
R 22%
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