Fuller, Smith & Turner (LON: FSTA) shares declined Monday after the company reported a trading update for the 43 weeks to January 21, stating it expects earnings to be below market expectations for the full year.
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FSTA's share price is down more than 4% at the time of writing.
The company said that while sales for the four-week Christmas and New Year period increased by 38% compared to last year, that was against a period impacted by Covid-19 and working-from-home guidance.
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However, the recent train strikes mean its sales, compared to the same four weeks in 2019, have declined by 5%, and since the start of October, the company estimates that industrial action has reduced its sales by around £4 million. As a result, the consequent impact on profitability means FSTA now expects to report earnings below market expectations for the full year.
There were some positives for the company, as its underlying positive sales momentum continued, with like-for-like sales for the 43-week period up 20% year-over-year, despite the challenging consumer backdrop. Compared to pre-pandemic levels, like-for-like sales are at 97% against the same period in FY 2020.
“We are encouraged by our underlying sales performance. While it is frustrating that the train strikes have set back our reported sales and earnings, it is reassuring that we are achieving our anticipated sales trajectory in periods unaffected by strikes,” commented Simon Emeny, Chief Executive of Fuller, Smith & Turner.
“While ongoing strike action will dampen sales, demand from customers remains good and we are optimistic that 2023 will deliver further sales growth through a busy calendar of events, and as office workers and tourists continue to return to the Capital,” he adds.
Emeny went on to state that the high inflation environment continues to impact the company's operating costs and margins, and they are focused on taking action to mitigate the costs.
“Although strike action and the cost-of-living crisis create short-term hurdles to our post-pandemic recovery, we remain confident in the resilience of the pub and the future opportunity for Fuller’s,” said Emeny.
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