Core Viewpoint - JD Wetherspoons' share price declined by 4.2% due to rising cost warnings overshadowing strong sales performance in challenging market conditions [3] Financial Performance - For the 52 weeks ending 27 July, Wetherspoons reported a 4.5% increase in headline sales to £2.1 billion, despite operating six fewer pubs compared to the previous financial year [4] - Like-for-like sales rose by 5.1% year-on-year [4] - Underlying pre-tax profit increased by 10.1% to £81.4 million, while underlying operating profit rose by 4.9% to £146.4 million [4] - Free cash flow surged by 71.5% year-on-year to £56.6 million [4] Cost Warnings - Wetherspoons anticipates that higher National Insurance contributions and an increased National Living Wage will add £60 million to its annual cost base [5] - Increased energy costs are expected to contribute an additional £7 million in expenses [5] - The Extended Producer Responsibility (EPR) tax will result in costs of £2.4 million this financial year, up from £800,000 in financial 2025 [5][6] Market Position and Outlook - Sales in the nine weeks to 28 September were up by 3.2% on a like-for-like basis, continuing to outperform the broader market [7] - August like-for-like sales improved by 3.7% year-on-year, significantly higher than the 0.5% rise reported for the wider pub industry [7] - Wetherspoons has outperformed the CGA RSM Hospitality Business Tracker for 36 consecutive months [7] - The company plans to open approximately 15 managed pubs and the same number of franchised sites in financial 2026 [7] Analyst Insights - Analysts noted that Wetherspoons' results reflect resilience in a cost-of-living climate, positioning it as a budget-friendly option [8] - Despite rising labor and energy costs, Wetherspoons has managed to grow profits faster than revenue, indicating a resilient business model [8] - However, concerns over rising costs have tempered enthusiasm for the company's improved sales figures [8]
Wetherspoons Shares Drop, As Cost Warnings Take Fizz Out Of FY Results
Forbes·2025-10-03 09:15