UK pub firm Wetherspoon nudges up full-year expectations
British pubs group JD Wetherspoon nudged up its full-year expectations after posting a better than expected 3.5pc sales rise and stronger margins in its fourth quarter.
The company, whose 800 value-led pubs have chimed well with cash-strapped British consumers in the downturn, said on Wednesday like-for-like sales in the 11 weeks to July 14 were up 3.5pc.
That was below a 6.3pc rise in its third quarter due to a strong comparative period but ahead of analyst forecasts. The firm said it was now on track to achieve "a slightly better outcome" before any exceptional items for the full year.
"This is a very strong performance and we take further encouragement from the margin beat given historic criticism of the group chasing revenue at the expense of margin," Investec analyst James Hollins said.
The group's operating margin, which has been trimmed by higher costs in areas like food and tax, rose from 8.5pc in the third quarter to 9.5pc in the period, helped by price hikes on drinks, according to analysts at Numis.
Operating margin for the year to date stood at 8.7pc, and could be a possible indicator for the future, the firm said, representing a decline from 9pc last year.
Before Wednesday's announcement the pub firm was on average expected to post annual pretax profit of £72m, according to Reuters data.
Like-for-like sales for the 50 weeks to July 14 were up 6pc, with total sales up 9.2pc.
Shares in the group, which has opened 29 new pubs this year and plans to open another 30 in the new fiscal year, closed at 668 pence yesterday, up 50pc on a year ago.