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WHSmith (Q3 trading statement 6 June)
This week’s trading statement from the long-lived British retailer, WHSmith, comes after it was voted the worst retailer on the high street by ‘Which?’ magazine readers, a title it has held for eight years. As has been the case for years now, the lacklustre performance of the high street division is more than compensated for by the stellar performance of its travel arm. Further expansion in Madrid and Rio de Janeiro confirms the ambitious growth plans, in particular with respect to the latter as it opens the door to more outlets in the Americas. The international division helps to explain why it has comfortably outperformed in the General Retailers Index, up 12.5% over the past 12 months against a 4% drop for the broader index. At 17 times forward earnings, it trades slightly above the five-year average of 15.4.
A rally from April into mid-May has run out of steam, as the area around £20.50 provides resistance. Indeed, we saw a lower high from the February high, with sellers pushing the price lower. Further losses would target £18.93, £18.54 and then £18.10. A move above £20.80, and ideally above £21.00, is needed to suggest a longer-term bullish move.