WH Smith chief executive Richard Handover disappointed the City yet again yesterday after revealing the summer heatwave had reduced sales and profits.
Mr Handover, who is due to flout City codes and become chairman next year, has been trying to boost the retailer's performance but was forced to warn retail analysts they needed to scale back their profit forecasts for the year.
"Certain days in June and July were pretty desperate. I suspect you'll find other retailers aren't showing a dissimilar picture," Mr Handover said. "People tend not to buy CDs and books when it's hot and sunny."
The shares fell 25.75p to 351.25p as analysts cut their forecasts for the year to end August. Shares in other non-food retailers such as Woolworths, down 0.5p to 38.75p, were also unsettled by the warning over the effects of the hot weather.
Analysts at broking house Evolution Beeson Gregory expressed disappointment with WH Smith. "Profit forecasts seem to fall every time the company has reported and the pre-close trading update will unnerve investors again," the analysts said. "We have reduced this year's forecast to £104m from £118m and cut next year's forecast to £115m."
Mr Handover admitted the hot summer weather was not the only factor to hurt profits, which he said would be "flat" in the high street business in the second half.
Sales from outlets in UK airports had been hurt by the Sars outbreak which reduced travel. Sales of CDs had also been affected by heavy discounting from supermarkets.
He noted rising sales in other areas. Book sales were up 9% like-for-like in the second half but this was boosted by sales of Harry Potter. Without Harry Potter, the rise was 3%.
He also pointed to rising sales in the last eight weeks in the troubled US travel business as Americans started to put their fears of air travel behind them.
The group is continuing to review the US travel operations and promised to update the City "in the near future".
Mr Handover said the main problem in the US travel business was its shops in hotels which he indicated were unlikely to remain in the group.
