Shares in pub company Mitchells & Butlers PLC (LSE:MAB) fell 4.7% to 262p after it reported flat third-quarter sales as the heatwave hit demand at its food-led pubs, offsetting stronger trading across drink-focused venues.
Like-for-like sales for the Toby Carvery, Miller & Carter and All Bar One owner grew 2.2% over the first 42 weeks of its financial year. Total sales increased 1.3%.
Food sales fell 2.4% during the third quarter as several extended periods of hot weather weighed on brands including Toby Carvery and Miller & Carter. Drink sales rose 2.6%, helped by World Cup football on some days.
Trading also faced strong comparisons with the previous year and a 0.8 percentage point hit from an earlier Easter this year.
M&B said it is speeding up its investment programme, completing 181 conversions and remodels so far in 2026, as well as acquiring 10 new sites, including two leasehold sites in Germany.
The company continues to expect around £120 million of cost inflation for the full year but said investment and an efficiency programme should allow it to meet market expectations.
Chief executive Phil Urban said the diversified portfolio had "moderated the impact of external factors".
Broker Panmure Liberum said the profit guidance was in line with consensus, while business-rates reforms announced by the government "could provide upside".
New prime minister Andy Burnham announced a 20% reduction in business-rates bills for most pubs, clubs and live music venues in England from April 2027, with roughly a £1,100 saving for a typical pub,
This saving is "illustrative rather than a fixed per-site payment, meaning the benefit to larger managed operators should be assessed against their qualifying rates bills", analysts said.
"The announcement should provide meaningful earnings support across the listed pub sector, partially offsetting persistent labour, food and utility cost inflation."
** UPDATE: Adds broker comment **
