Britons lapped up lager and cocktails at JD Wetherspoon on its busiest Saturday during the May Day holiday weekend, leading the pub group on Wednesday 10 May to forecast record annual sales and profit at the higher end of analyst expectations.
Details
Shares of the company jumped as much as 9.6% to 816 pence in morning trading on Wednesday 10 May, its highest since April 2022.
Analysts on average expect profit for the year through July of about £32 million, according to Refinitiv data. It ended the previous year with a loss of £30.4 million.
Customers paired ale and beer with pub favourites like fish and chips and steak and kidney pie during that weekend, chairman Tim Martin told Reuters.
While Wetherspoon has bounced back from pandemic lows more quickly than some of its competitors, high labour, food and energy costs continue to weigh on earnings potential.
"Food inflation is still a major issue in large categories of products," Martin said.
Food prices in Britain rose 15.7% in the year to April, though the British Retail Consortium said lower prices were on the horizon.
As of 30 April, the company's net debt was £738 million, about £67 million lower than immediately before the pandemic.
"Wetherspoon's value proposition is holding it in good stead as the cost-of-living crisis continues and the action to bring debt down and optimise its portfolio of pubs is the right move," Derren Nathan, analyst at Hargreaves Lansdown said.
Additional Information
Like-for-like sales for the 13-week period ended 30 April rose 9.1% from pre-pandemic levels, and sales during the Easter week were the highest for the group, Wetherspoon said, without providing details.
The above news was followed by the following update:
UPDATE 3-Wetherspoon's Busiest Saturday Lifts Profit Expectations
JD Wetherspoon enjoyed its busiest ever Saturday over the May Day weekend, the British pub group said on Wednesday 10 May, as demand for its cut-price lager and cocktails led it to forecast annual profit at the higher end of analyst expectations.
Shares in the company jumped as much as 9.6% to 816 pence in early trade on Wednesday 10 May, their highest since April 2022.
Customers paired ale and beer with pub favourites like fish and chips and steak and kidney pie during May Day holiday weekend, chairman Tim Martin told Reuters.
The company didn't give details on how many customers it served on the Saturday, nor on analysts' range of profit forecasts.
According to Refinitiv data, analysts on average expect profit for the year through July of about £32 million, compared with a loss of £30.4 million the year before.
While Wetherspoon has bounced back from pandemic lows more quickly than some of its competitors, high labour, food and energy costs remain a challenge.
"Food inflation is still a major issue in large categories of products," Martin said.
Food prices in Britain rose 15.7% in the year to April, though the British Retail Consortium said lower prices were on the horizon.
As of 30 April, Wetherspoon's net debt was £738 million, about 67 million lower than immediately before the pandemic.
"Wetherspoon's value proposition is holding it in good stead as the cost-of-living crisis continues and the action to bring debt down and optimise its portfolio of pubs is the right move," Hargreaves Lansdown analyst Derren Nathan said.
Shares in pub group fell almost 54% in 2022, but are more up over 75% this year.
Like-for-like sales for the 13-weeks ended 30 April rose 9.1% from pre-pandemic levels, and sales during the Easter week were the highest ever for the group, Wetherspoon said, without providing details.
Read More: Wetherspoon Returns To Profit As Supply Issues Ease
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