Sales at JD Wetherspoon PLC (LON:JDW) surged over the past three months, as cash-conscious punters continue to flock to its no-frills pubs.
But shares fell 3.4% to 1,299p at the opening bell on Wednesday as margin concerns persist.
READ: ‘Spoons’ profits slip in first half on higher staff costs
Like-for-like sales, which strip out the impact of new and closed stores, soared by 7.6% in the 13 weeks to the end of April, while total sales jumped 8.4%.
So far this year, like-for-likes have increased by 6.8%. Total sales are up by 7.6%.
Despite the booming sales, which were better than analysts had predicted, ‘Spoons failed to upgrade guidance.
“We continue to anticipate a trading outcome for this financial year in line with our previous expectations,” said chairman Tim Martin, who, for the first time since the Brexit vote, chose not to rant about Britain’s departure from the European Union in his firm’s statement.
City broker Liberum said the unchanged forecasts implied that the FTSE 250 group’s already-low margins “remain under significant pressure”, particularly from labour costs.
Annual profits still expected to fall
At the beginning of its current financial year (August), ‘Spoons said it would need like-for-like sales growth of around 4.0% to keep profits where they were.
But that estimate was thrown out of the window in November, after ‘Spoons was forced to up staff wages given the competitive jobs market, adding to the soaring costs hitting most of the industry.
As a result, despite the surge in like-for-like growth so far this year, bosses still expect profits to be “slightly below” last year’s record total of £107.2mln.