British travel retailer WH Smith lowered its full-year profit outlook on Thursday after a review revealed earnings had been overstated due to premature recognition of supplier income in its North American division.
The financial review identified an overstatement of around 30 million pounds ($40.34 million) in expected headline trading profit, WH Smith said, mainly due to supplier income in North America being recognized too early.
The error prompted a cut in profit outlook at the division to about 25 million pounds, down from previous forecast of about 55 million pounds.
The retailer now expects group pre-tax profit for the year ending August 31 to be around 110 million pounds.
In April, WH Smith had forecast annual profit to be in line with market expectations, which were around 182.6 million pounds, according to LSEG data.
The company has instructed Deloitte to undertake an independent and comprehensive review.
($1 = 0.7437 pounds)
