WH Smith is being investigated by the City watchdog after the company revealed accounting failures in its US operations.
The Financial Conduct Authority (FCA) said: “The investigation concerns potential breaches of UK Listing Principles and Rules and Disclosure and Transparency Rules in relation to the matters announced by WH Smith PLC on 19 November 2025.”
On that day WH Smith revealed that Carl Cowling, its chief executive of six years who had presided over the sale of the company’s UK high street business earlier in the year, had resigned after an independent review into an overstatement of earnings.
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Experts from Deloitte found WH Smith’s North America division – its key area for growth – had been recognising supplier income incorrectly.
Profit forecasts were revised sharply lower as a result – its second such move during a year that has seen shares tumble by more than 40%.
The company said on Friday that it expected profitability next year to be static on 2025 financial year levels – reported at £108m – as it reviews some of its North American businesses in the wake of the accounting problems.
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Its annual results were delayed twice as it got to grips with the issues.
WH Smith plans to recover overpaid bonuses from its former senior executives following previous profit restatements.
The company’s North American review includes its InMotion business, which sells electronic and digital accessories primarily in airports.
Interim boss Andrew Harrison told investors: “The Board and I are acutely aware that we have much to do to rebuild confidence in WH Smith and deliver stronger returns as we move forward.
The stock was a further 6% down at the market open but that decline later petered out.
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