Volcano casts a cloud over WH Smith's airport sales

The group reported a 4 per cent slide in like-for-like sales across WH Smith Travel – which operates from 495 outlets in airports, train stations and at motorway service stations – after the ash cloud caused widespread flight chaos.

Excluding the disruption, travel stores sales slipped 2 per cent in the 14 weeks to June 5, but WH Smith has already said the hit was unlikely to affect profits.

The group, which also announced a new chairman yesterday to replace five-year incumbent Robert Walker, added that "while airport passenger numbers have, as expected, remained soft, we continue to outperform".

WH Smith failed to deliver any uplift in the high street division since the half year, with comparable sales remaining 4 per cent below a year earlier.

The group is rebalancing the mix of the business away from lower margin CD and DVDs and on to books, stationery and confectionery markets – a move which is impacting sales.

Like-for-like sales across both businesses were down 4 per cent in the 14-week period.

Walker Boyd, who re-joined the board in February as a non-executive director, will become chairman in September. Mr Boyd is currently finance director of jewellery firm Signet, which owns Ernest Jones and H Samuel in the UK as well as major retail operations in the United States.

He will work alongside chief executive Kate Swann, who has overseen a major overhaul of the retail estate and improved the company's fortunes.

The group's defensive qualities – with an average transaction cost of around 5 – has helped it weather the recent tough trading conditions. Freddie George, retail analyst at Seymour Pierce stockbrokers, said: "The company has an impressive track record with Kate Swann at the helm.

"We are, however, becoming more concerned that the rate of growth in earnings is beginning to slow and that the significant gross margin gains of the last five years cannot be continued while the like-for-likes continue to decline."

WH Smith is hoping that lower costs will offset the ash cloud blow to sales, as rent payments are linked to how much revenue the stores make.

The group confirmed it was performing in line with market expectations, however it has reservations over the outlook for trading conditions.

It said: "The economic environment remains uncertain and whilst we continue to be cautious about consumer spending, we remain confident in the outcome for the full year."