High-street stalwart WHSmith has warned the coronavirus could hit its full-year revenue by up to £130m.
The stationery and books retailer warned the outbreak could have an impact on underlying pre-tax profits by between £30m and £40m. The Covid-19 outbreak has hit its Asia Pacific travel business, and airport sites in the UK, US and Europe.
A spokesperson said the virus had had a ‘significant impact’ on its Asia Pacific travel business, which accounts for approximately 5% of Travel’s revenue. Over the last two weeks the group has seen a ‘material reduction in passenger numbers’ at airports in the UK (approximately 60% of Travel’s revenue), US (around a quarter of Travel’s revenue) and Europe.
This comes at a time when WHSmith’s travel business was soaring, and shoring up declining high-street sales to drive the group to sales growth over the past six months.
The retailer said that Covid-19 will result in a ‘reduction in our expectations for revenue and profit across the travel business for the second half.’
For its UK travel business it predicted revenues to fall 15% below forecasts for the next six months, with a 35% decline in March and April. For its US division and rest of its international business it predicted sales to fall 20% below forecasts for the half year.
In its recent trading update the heritage retailer said: “WHSmith is a resilient business with a strong balance sheet, substantial cash liquidity and strong cashflow. The group has a strong management team in place and has consistently demonstrated that it can adapt and respond quickly to changing market conditions.”
The retailer stated that while it is currently not seeing a significant impact on its high-street business, it recognised that Covid-19 could result in reduced high-street footfall.