skip to main content

JD Wetherspoon sees sales growth in third quarter on steady demand

JD Wetherspoon has reported a 5.6% rise in like-for-like sales in its third quarter
JD Wetherspoon has reported a 5.6% rise in like-for-like sales in its third quarter

British pub group JD Wetherspoon's third-quarter like-for-like sales rose by 5.6%, it said today, but gave no full-year guidance as mounting costs and a challenging economy complicated forecasting.

The pub group has been upgrading its existing pubs and expanding into high-traffic locations.

However, inflation and the economic uncertainty caused by trade tensions mean the hospitality sector faces the likelihood of lower consumer spending.

British companies are also experiencing higher operating costs following the UK budget last October.

Wetherspoon Chairman Tim Martin, who had ruled out price hikes or hiring curbs to mitigate increased labour costs, reiterated his expectation for a "reasonable outcome" for the financial year in the company's trading update without giving numbers.

Analysts were divided on the company's prospects.

Jefferies analysts said in a note that Wetherspoon's low price position meant it was well-placed compared to its rivals to absorb wage inflation.

The pub group expects an additional £1.2m a week in operating costs from higher wages and taxes.

However, Panmure Liberum analysts said the company had limited scope to pass costs onto customers.

"We retain our concerns over long-term margin recovery potential, which will slow in the face of rising labour costs as the scope for price rises and disposals diminishes, and as the core business becomes more capital intensive," they said.

Wetherspoon said it expects year-end debt to be between £720-740m, up from its prior estimate of £680-700m.