WH Smith reported a pre-tax loss of £25 million for the six months to February 2026, widening from £4 million the previous year, according to major media reports. Its revenue increased by 2% to £748 million in the same period. The company has adopted a more cautious outlook due to the impact of the Middle East conflict on passenger numbers and consumer confidence. According to WH Smith, the group remains on track to deliver guidance for the year but is mindful of geopolitical uncertainty in the Middle East.
The conflict escalated after reports indicated the US and Israel launched a surprise attack on Iran on February 28, 2026. Iran has since launched ballistic missiles targeting Israel, US military bases, oil depots, and other infrastructure across the Gulf region. A temporary ceasefire was announced in the early hours of April 8, 2026, but its current status is unclear.
In light of the uncertainty arising from the conflict in the Middle East, the Group is taking a more cautious outlook reflecting the impact on passenger numbers and weaker consumer confidence.
Energy markets have been severely disrupted, with oil prices soaring. Brent crude rose over 40% from $72 per barrel on February 27, 2026, to $106 per barrel as of an unspecified Monday, according to research from six sources. Liquefied natural gas (LNG) prices have risen almost 60% since the start of the war, according to Muyu Xu, a senior crude oil analyst at Kpler. QatarEnergy suspended its LNG production after an Iranian drone attack on March 2, 2026, straining the global LNG market.
The Strait of Hormuz closed on March 4, 2026, causing Brent crude to surge past $120 per barrel and forcing QatarEnergy to declare force majeure on all exports, according to research from six sources. Iranian attacks on vessels in the strait have dramatically reduced traffic, affecting about 20% of global oil and gas supplies. The International Energy Agency described the conflict as leading to the largest supply disruption in the history of the global oil market. Oil production of Kuwait, Iraq, Saudi Arabia, and the UAE collectively dropped by at least 10 million barrels per day by March 12, 2026.
Much will depend on the peak summer trading period and the Group assumes no immediate improvement in consumer confidence.
The regional conflict is costing the Middle East travel and tourism industry €515 million per day, according to research from six sources. Regional aviation hubs in Abu Dhabi, Dubai, Doha, and Bahrain typically process around 526,000 passengers per day, but numbers have plummeted due to airspace closures. Airlines are operating limited flights; for example, Emirates, Etihad, and Qatar Airways operated significantly fewer flights in March 2026 compared to February 2026, according to Flightradar24 analysis. Tourism Economics projects inbound arrivals to the Middle East could decline 11%-27% year on year in 2026 due to the conflict, compared to a December forecast of 13% growth.
WH Smith faces specific challenges amid this turmoil. The company sold its 480 high street stores to Modella Capital for £76 million in June 2025, and these stores were rebranded as TG Jones by their new owners. WH Smith's revenue growth was flat in the UK due to a softening in air travel caused by the Middle East conflict, but it saw revenue grow in its North American and rest of the world markets. The company is also recovering from an accounting error that overstated its profit by around £30 million, leading to the resignation of CEO Carl Cowling in November 2025.
Assuming jet fuel supplies 'can be maintained,' WH Smith said it expects its full-year profit before tax and underlying items to sit between £90m and £105m, down from last year’s £108m.
Regarding financial guidance, WH Smith expects full-year profit before tax and underlying items to be between £90 million and £105 million, down from £108 million the previous year, assuming jet fuel supplies can be maintained. The company said it expects this range, down from last year’s figure, if jet fuel supplies can be maintained. The extent of jet fuel shortages and their direct impact on airlines and travel-dependent businesses remains uncertain.
A humanitarian crisis is emerging in Gulf states. The maritime blockade triggered a grocery supply emergency across Gulf Cooperation Council states, disrupting over 80% of caloric intake and causing price spikes of 40-120%. The crisis has shifted toward fears of a humanitarian crisis after Iranian strikes on desalination plants, the source of 99% of drinking water in Kuwait and Qatar. The full humanitarian situation regarding food and water supplies beyond initial reports is not yet clear.
WH Smith said its new flagship stores in Heathrow Airport are a cause for optimism.
The regional aviation sector, including Emirates and Qatar Airways, faced near-total cessation due to airspace closures, disrupting global air travel. This has compounded challenges for businesses reliant on passenger traffic.
The UK prime minister has assured the nation that the government has a plan, but announcements were short on responding to emerging economic fallout. The UK's leading airlines have called on the government to cut tax and regulation to better prepare the firms to deal with the impending fuel drought, according to major media reports. The specific measures in the UK government's plan to address the economic fallout have not been detailed.
Key unknowns persist in this developing situation. The exact current status of the ceasefire announced on April 8, 2026, and whether it is holding or has been broken remains unclear. The extent of jet fuel shortages and their direct impact on airlines and travel-dependent businesses remains uncertain. The full humanitarian situation regarding food and water supplies beyond initial reports is not yet clear. Additionally, the long-term economic recovery prospects for the Middle East region and global markets post-conflict are uncertain, with potential lasting effects on trade and tourism.