WHSmith today became the first British retailer since Christmas to warn of a profits shortfall after disappointing festive sales.
It braced investors for profits 'materially below current market expectations' after flat like-for-like sales for the 17 weeks to December 27.
The group reacted by replacing its head of retail in the UK with chief executive Kate Swann, who announced a detailed operational and financial review of the business.
Analysts had expected full-year profits of between £90m and £100m, but now expect the figure to be more than 20% lower than forecast.
Pressure has been greatest in WHSmith's entertainment division, which includes CDs and DVDs, with sales 3% lower in the 17-week period compared with last year.
Britain's biggest bookseller said the pressure on margins from book sales has been 'intense', although its publishing and news distribution businesses were trading well.
