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Wetherspoons issues profit warning as costs rise and sales disappoint
The pub chain expects full-year profits to come in below market expectations at its October results, and it forecasts net debt of about £720 million.
J.D. Wetherspoon issued another profit warning, saying trading showed weaker sales than expected while costs continued to rise across food, labor, repairs, energy, and business rates, according to Yahoo Finance.
The company reported like-for-like sales rose 4% in the 12 weeks to July 19, bringing year-to-date like-for-like sales to up 4.2%, but management said the growth was not enough to relieve margin pressure or meet investor expectations linked to the FIFA World Cup and warmer weather.
Wetherspoon said full-year profits are likely to be below market expectations when it reports results in October. It also attributed the warning to marginally lower sales than anticipated in the final quarter.
The update projects net debt of about £720 million, broadly in line with the end of the last financial year and below earlier forecasts of £740 million to £760 million. The company said it has opened eight pubs and sold nine so far this year, while adding 15 franchised pubs to reach 23 franchised locations.