WH Smith Faces Investigation Over Accounting and Earnings Overstatement Issues
The Financial Conduct Authority has launched an investigation into WH Smith for potential breaches of UK Listing Principles, Rules, and Disclosure and Transparency Rules related to disclosures made by the company on 19 November 2025.
An independent review uncovered earnings overstatement issues in WH Smith's North America division, where Deloitte found supplier income was being recognised incorrectly. This led to sharp reductions in profit forecasts and contributed to a decline in the company's share price by over 40% during the year.
Following these revelations, Carl Cowling, WH Smith's chief executive for six years who had overseen the sale of the UK high street business earlier in the year, resigned. The company has delayed its annual results twice while addressing these accounting problems and is conducting a review of certain North American operations, including the InMotion business, which sells electronic and digital accessories primarily in airports.
WH Smith plans to recover overpaid bonuses from former senior executives as part of profit restatements. The company expects next year's profitability to remain roughly flat compared to the 2025 level of £108 million.
Interim chief executive Andrew Harrison emphasized that the board must rebuild confidence and deliver stronger returns moving forward. The company's stock opened with a decline of about 6%, though this drop eased later in the trading session.
