JD Wetherspoon PLC (LSE:JDW), the pub chain, has warned that full-year profits may come in slightly below market expectations as rising taxes, wages and energy costs weigh on the business.
Chairman Tim Martin said increases in national insurance and labour rates would add approximately £60 million to annual costs, with non-commodity energy costs adding a further £7 million and a new packaging levy costing £2.4 million in the current year.
The warning came alongside interim results showing a sharp fall in profitability despite healthy sales growth, with pre-tax profit dropping 31.9% to £22.4 million in the 26 weeks to 25 January 2026, against £32.9 million a year earlier.
Revenue rose 5.7% to £1.087 billion, with like-for-like sales up 4.8%.
Martin said the company had outperformed the wider hospitality sector for the 42nd consecutive month, with like-for-like sales up 3.2% in February against an industry average of -0.2%, according to the CGA RSM Hospitality Business Tracker, an industry benchmarking measure.
In the seven weeks to 15 March, like-for-like sales increased by 2.6%.
The group held its half-year dividend at 4p per share, unchanged from the prior year.
Martin pointed to "considerable pressure on consumer finances" alongside higher costs across the hospitality sector, though he said Wetherspoon would endeavour to keep price increases to a minimum.
The company said its forecast for year-end net debt remained unchanged.
Wetherspoon operates around 800 pubs across the UK and Ireland and has long positioned itself as a value-led operator, a strategy that has helped it outpace competitors during periods of consumer stress.