The BBC reports that entertainment retailer HMV has warned that tough trading conditions mean its annual profits are set to come in at the bottom end of forecasts, adding that while efforts to improve sales are "working effectively", group like-for-like sales fell 1.3% in the 12 weeks to the end of September. Like-for-like sales - which exclude new stores - at its bookseller Waterstone's also fell 3.7% during the period. HMV warned that conditions would remain "difficult" for the rest of the year. "We now expect full year profits to be towards the bottom of the range of market expectations," HMV said in a statement.

Meanwhile, WHSmith's stock isn't faring so well, either. Analyst Richard Ratner of Seymour Pierce downgraded its stock from "hold" to "underperform," blaming overvalued stock for the change.