The fickle nature of the market is such that a company can outperform its peers and still be punished... for not doing even better.
That effectively was the story of Mitchells & Butlers PLC (LSE:MAB), the pub chain, whose shares were down around 10% at one point in a busy early session despite delivering a fairly decent update on trading.
In a pre-close statement for the 51 weeks to September 20, the All Bar One and Harvester operator said like-for-like sales were up 4.2%, with food growing 4.1% and drink 4.0%.
Total sales rose 3.9% over the year. Trading was strongest in mid-market pubs and restaurants, while performance in London and more premium venues lagged.
The company increased investment, completing 201 site conversions and remodels compared with 185 last year, alongside two new openings and the purchase of two freehold properties. It is also rolling out energy-saving initiatives, including solar panels.
Looking ahead, the group expects full-year results to meet consensus forecasts. However, it warned of about £130 million of cost inflation in the new financial year, roughly 6% of its cost base.
Chief executive Phil Urban said: “We remained consistently ahead of the market, with broad-based sales growth across food and drink.”
Analysts noted that while sales outperformed the sector, the figures still fell short of more optimistic expectations.
Shore Capital noted that the fourth quarter was softer than anticipated, though it described the update as 'solid'.
Peel Hunt, meanwhile, thinks there's 'upside' to enhance profit margins. The broker repeated its 'buy' with a 375p price target.
Mid-morning, the stock was off 6% at 247.5p.