WH Smith shares tumble after accounting blunder

'Investors will be sobbing'

'Not a good look'

WH Smith name to disappear from High Street after sale

WH Smith High Street sales fall amid talks to sell stores

The company has cut its profit forecasts in the region as a result and has ordered a review

The firm said the mistake was because of an issue in how it calculated the amount of supplier income it received - essentially causing it to be logged too early.

Analysts have said the error is a "huge embarrassment" for WH Smith which is looking for a fresh start after selling its UK high street division earlier this year.

The error means the group is now expecting a trading profit for North America of about £25m for the year to August - a cut from the £55m initially forecast.

As a result, the company lowered its outlook for annual pre-tax profits to around £110m.

The company has asked accountancy firm Deloitte to conduct a review into the blunder. WH Smith said it will provide an update on this review alongside its full-year results.

AJ Bell investment analyst Dan Coatsworth said the error was "nothing short of a disaster".

He said North America is crucial to WH Smith's growth ambitions, and "the loose thread of an accounting error in this part of the group" will cause concern about further problems.

"Investors will be sobbing into their cornflakes on the news," he said.

WH Smith, which is London-listed, sold its High Street arm to Hobbycraft owner Modella Capital in June.

As part of the deal, the WH Smith name disappeared from British high streets and was replaced

Meanwhile, WH Smith now trades exclusively as a travel retailer based mainly at airports, railway stations, hospitals, and service stations around the world.

Mr Coatsworth said these shops "benefit from a captive audience allowing the company to generate strong margins".

"However, the US news has tarnished what WH Smith would have hoped could be a fresh start for the business."

Susannah Streeter, head of money and markets at Hargreaves Lansdown, said shareholders were "reeling" from the error.

"Getting it so wrong is not a good look and affects the reputation of the company."

Retail analyst Catherine Shuttleworth said WH Smith's sale of its high-street retail business was largely predicated on its potential for North American growth, but the company faces stiff competition from chains like Walmart.

"Just buying and selling isn't enough for high-street chains anymore," she added.

"A lot of their money is now made from working with retailers, paying for listings for their products to be seen in stores."