Shares in pub group JD Wetherspoon (LON:JDW) dropped 8% after chairman Tim Martin confirmed FY earnings were likely to miss forecasts. Martin blamed lower-than-expected Q4 sales and higher costs across food, labour, repairs, energy and business rates.
Below expectations
In a trading update covering the 12 weeks to 19 July, the firm said like-for-like sales rose 4%. That was marginally behind the 4.3% increase of the first nine months and took the annual growth rate to 4.2%.
As a result, FY profit is likely to be below market expectations, said Martin. According to Stockopedia, the consensus forecasts for FY 26 net profit and EPS are £52 million and 45.8p.
The group’s managed estate was more or less unchanged at 793 sites during the year, with eight new openings and nine properties sold. In addition, 15 new franchised pubs were opened during the year, taking the total to 23.
Given the recent upbeat tone from Marston’s (LON:MARS) and Young’s (LON:YNGA), Wetherspoon’s downbeat Q4 is a surprise. Marston’s reported strong trading during the World Cup with LFL sales up 22% on England matchdays. Its new-format Grandstand pubs, with huge screens to create a ‘stadium atmosphere, saw sales up 170% on matchdays.
Young’s reported a 5.5% increase in the 14 weeks to 6 July, despite a strong prior-year comparator. Trading was ‘exceptional’ over the May bank holiday weekend, while the World Cup and Wimbledon helped boost sales in June and July.
The market reaction to today’s update seems somewhat harsh given the firm already flagged months ago profits would miss estimates. However, considering the shares have put on around 160p or 27% since the start of May, giving back 8% isn’t a disaster.
Read the press release here: https://www.investors.jdwetherspoon.com/
