(Reuters) – British retailer WH Smith said on Wednesday it was well positioned for the peak summer, betting on strong travel demand that is expected to propel sales across its product range from books to sandwiches.
Expecting resilient travel demand, companies like WH Smith with a presence in travel hotspots are banking on a strong summer season, especially in Europe where the influx of visitors for events like the Olympic Games and the European soccer championship, the Euros, promises to elevate foot traffic in transit areas.
Shares of the retailer, which has stores in travel hubs and sells everything from books to snacks to travel accessories like neck pillows and eye shades, were up more than 3% at 1,181 pence, as of 0800 GMT.
Various airline operators like EasyJet and Wizz Air and airport food chain operator SSP Group also forecast strong summer demand this year.
WH Smith, an over 230-year-old company, reiterated its forecast for the year, but did not disclose a range, while analysts at JPMorgan stuck to their pre-tax profit expectations of about 166 million pounds ($212.1 million).
WH Smith said it was taking initiatives across its North America business, including increasing its range of snacking and confectionery and the number of chillers in stores after its like-for-like revenue for the 13-week period ended June 1 remained flat.
“We see potential for investor perception to improve on WH Smith due to a likely acceleration of U.S. travel sales growth and a sharp improvement in travel gross margin in the second half,” analysts at RBC Capital Markets said in a note.
The company reported a 4% growth in like-for-like sales for the 13-week period, compared to a 14% rise in sales a year earlier.
($1 = 0.7828 pounds)
(Reporting by Echha Jain in Bengaluru; Editing by Sonia Cheema)