By Radhika Anilkumar
(Reuters) -British pub group J D Wetherspoon said on Friday sales growth had slowed at the start of its fiscal second half and that margins were still below pre-pandemic levels, sending its shares down as much as 7% in early trade.
The group, which owns and operates pubs across Britain and Ireland, reported a 5.8% increase in like-for-like sales for the seven weeks to March 17. That was down from a 9.9% increase in the half-year ended Jan. 28.
“.. For now like-for-like growth has taken a step down. 5.8% isn’t awful but if it stays at this level for the rest of the year the market’s likely to be disappointed,” Derren Nathan, head of equity research at Hargreaves Lansdown, said in a note.
While the high inflation of recent years has moderated, pubs still face pressures from labour costs and the price of some raw materials.
Wetherspoon reported an operating profit margin of 6.8% for the first half, still below the pre-COVID level of 7.1%.
“It’s been a very slow climb back from the pandemic, with an acceleration (of margins) this financial year- if the improvements continue we’ll be back to pre pandemic levels in the next year or two,” Chairman Tim Martin said in a text message to Reuters.
The group reported a profit before tax of 36 million pounds ($45.46 million) for the 26 weeks ended on Jan. 28, compared with 4.6 million pounds a year earlier.
The shares were down 5% at 0845 GMT to 756.5 pence.
($1 = 0.7920 pounds)
(Reporting by Radhika Anilkumar in Bengaluru; Editing by Sherry Jacob-Phillips and Mark Potter)
