Shares of WHSmith plunged 17 per cent on Wednesday following a surprise equity fundraising plan and a sharp cut to annual profit forecasts. To strengthen its balance sheet, the company will issue 26 million new shares, representing roughly 20 per cent of its current share capital. This move comes as the retailer struggles with slowing airport spending.

Revised profit guidance now places pre-tax earnings between £75mn and £90mn, a significant drop from the previous £90mn to £105mn range. Like-for-like sales grew only 1 per cent over the last seven weeks. Middle East conflicts and higher airfares have dampened travel, specifically hurting North American sales, which fell 4 per cent recently.

Management aims to lower net debt from £496mn to roughly two times earnings. This effort follows a dividend suspension and a £150mn impairment charge linked to its InMotion technology business. Pressure is mounting as the UK accounting regulator investigates PwC's audit after the company admitted to accounting errors regarding supplier payments in North America.

These combined financial shocks reflect a volatile period for the travel-focused retailer. Investors are reacting to the dilution of shares and the fallout from regulatory scrutiny. The company is now fighting to stabilize its leverage while navigating a decline in passenger traffic to key hubs like Las Vegas.