WHSmith lowers US profit forecast after £30m accounting overstatement
Group headline profit before tax and exceptional items has also been revised down to £110m
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WHSmith has cut its profit forecast for its North American business after uncovering an accounting overstatement of around £30m.
As a result, it now expects headline trading profit from North America to be about £25m for the year ending 31 August 2025, compared with previous market expectations of around £55m.
The retailer said the error was largely linked to the accelerated recognition of supplier income in the division.
Group headline profit before tax and exceptional items has also been revised down to £110m.
The board has appointed Deloitte to conduct an independent review of the matter.
The update comes shortly after Card Factory’s £24m purchase of WHSmith’s Funky Pigeon online greetings card business.
Once the deal is complete, Card Factory will be the second largest online card and attached gift retailer in the UK market, according to the group.
The acquired platform, which operates funkypigeon.com, generated on average around £32m in full-year revenues and around £5m EBITDA over the last two financial years.
