The high street and travel retail giant WH Smith is under formal investigation by the UK's financial regulator, the Financial Conduct Authority (FCA), following the discovery of significant accounting problems within its North American operations.
Watchdog Launches Formal Probe
On Friday 19 December 2025, the FCA confirmed it had opened an investigation into potential breaches of listing and transparency rules by WH Smith PLC. This action relates directly to the company's announcement on 19 November 2025, which revealed serious accounting issues.
The investigation centres on whether the company breached the UK Listing Principles and the Disclosure and Transparency Rules. The FCA's move underscores the severity of the financial misreporting that has shaken investor confidence in the firm.
Executive Fallout and Financial Revisions
The crisis led to the immediate resignation of Carl Cowling, the company's chief executive of six years. His departure came after an independent review, conducted by experts from Deloitte, found that WH Smith's key North American division had been recognising supplier income incorrectly.
This accounting failure forced the company to sharply revise its profit forecasts lower for the second time in a year. The repeated downgrades have contributed to a dramatic fall in the company's share price, which has tumbled by more than 40% over the course of 2025.
Ongoing Business Impact and Market Reaction
In its latest update, WH Smith stated it now expects profitability for the next financial year to be static at the 2025 level of £108 million. The company is conducting a review of some of its North American businesses in the wake of the scandal.
The market reaction to the FCA news was swiftly negative. On the morning of the announcement, WH Smith's stock fell a further 2% in early trading, extending a painful year for shareholders. This investigation adds a significant new layer of uncertainty for a business that sold its UK high street operation earlier in the year to focus on its travel and North American growth strategy.
