J D Wetherspoon’s Sales Rise but Profit Outlook Tempered by Rising Costs

J D Wetherspoon plc (JDW.L) has released a trading update indicating robust sales growth, but cautioned that rising costs will likely impact full-year profits.

The pub chain anticipates a full-year trading outcome slightly below that achieved in FY25.

Like-for-like (LFL) sales increased by 4.7% in the 25 weeks leading up to January 18, 2026, compared to the same period last year. Bar sales led the charge with a 6.9% increase, followed by slot/fruit machines at 9.1%, and food at 1.3%. Hotel room sales experienced a slight dip of 0.7%.

The momentum accelerated in the second quarter (the last 12 weeks of the 25-week period), with LFL sales climbing 6.1% higher than the previous year. Total sales have grown by 5.3% year-to-date. The Christmas period, spanning three weeks from December 15, 2025, to January 4, 2026, saw an impressive 8.8% surge in LFL sales.

The company expects interest costs for FY26, excluding IFRS 16 notional interest, to be around £47 million, a slight decrease from £49 million in 2025. Including IFRS 16 notional interest, the annual interest cost is expected to be approximately £60 million.

Debt levels are projected to be between £740 million and £760 million at the end of FY26, up from £724 million in FY25. J D Wetherspoon has also been actively buying back its own shares, purchasing 2,770,750 shares at an average price of £7.22 per share for cancellation year-to-date.

Wetherspoon has been expanding its estate, opening six pubs so far this year in locations including London Bridge station, Paddington, and Kenilworth. The company plans to open a total of 15 pubs in the current financial year. Six pubs have been sold, generating a net cash inflow of £3.3 million.

The managed trading estate currently comprises 794 pubs. Eight franchised pubs have opened in the year-to-date, bringing the total to 16, with a further 10-15 expected to open, including the company's first venture into mainland Spain at Alicante Airport.

The interim results for the six months ending January 25, 2026, are scheduled to be announced on March 20, 2026.

Wetherspoon chairman Tim Martin acknowledged the sales growth but highlighted the impact of rising costs. “We are pleased with the sales growth in the financial year, and with the increased momentum in the second quarter,” Martin stated.

However, he noted that “Costs have been higher than anticipated, with energy, wages, repairs and business rates, for example, increasing by £45 million in the first 25 weeks.”

This cost inflation is expected to impact profitability. Profits in the first half are likely to be lower than the comparable period in the previous financial year.