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Wetherspoon flags profit shortfall as costs rise and sales disappoint

Shares fell 10% and the pub chain expects full-year profits to come in below market expectations when it reports earnings in October.

Reported · Written up by our desk · Equities

JD Wetherspoon issued its fourth profit warning in seven months, citing worse-than-expected sales and higher costs across food, labor, energy, repairs, and business rates. The company warned profits for the year are likely to fall below market expectations, with only marginally lower sales in the final quarter, when it reports full-year earnings in October.

The update showed like-for-like sales rose just 4% over the 12 weeks to 19 July, despite hopes that customers would boost demand for pub food and drinks around the Fifa World Cup. The late kick-off times of the tournament, driven by North American hosts, were cited as making it harder to benefit compared with previous years.

Wetherspoon said the pressures are being compounded by recent rises in the UK minimum wage and business rates that took effect at the start of April. The hospitality sector has also faced higher food and heating bills tied to elevated energy prices, which the company linked to the US-Israel war on Iran.

The company also expects net debt to reach £720 million, in line with the end of its last financial year, after previously forecasting a range of £740 million to £760 million. Shares fell 10% on Wednesday morning following the trading update, according to The Guardian Business.

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