The J D Wetherspoon plc (LON: JDW) share price fell 1.71% after releasing a trading update for the first half of its current financial year, represented by the six months ending 28 January 2024. The company reported that like-for-like sales in the 25 weeks to 21 January 2024 were up 10.1% compared to a similar period last year.
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The growth was broken down into various segments, with bar sales rising by 11.8%, food sales by 7.9%, and slot/fruit machine revenues by 10.4%. Additionally, hotel room sales saw a modest increase of 3.1%.
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More recent trends in the last 12 weeks show an even more encouraging picture, with LFL sales climbing 11.1% over the same period last year. Overall, Wetherspoon’s total sales have grown by 8.4% in the year to date.
The “Coffer CGA Business Tracker,” which reports monthly LFL sales for multiple pub and restaurant companies, indicates that the industry experienced an LFL sales increase of 8.8% in December, the latest month for which data is available. Wetherspoon surpassed this industry benchmark with an impressive LFL sales increase of 15.2%.
In the last three weeks of the reported period, Wetherspoon continued its strong performance, posting an LFL sales increase of 5.8%. This marks the 16th consecutive month where Wetherspoon has outperformed the tracker.
Regarding financing, Wetherspoon anticipates its interest costs for the fiscal year 2024, excluding IFRS 16 notional interest, to be roughly equivalent to FY23, which amounted to £51 million.
In property developments, Wetherspoon has opened two new pubs in the current year, located at London’s Heathrow Airport and London Euston Railway Station. In addition, the company has sold five pubs and either surrendered or sublet eight leasehold pubs, resulting in a cash inflow of £3.8 million. As of now, Wetherspoon operates a total of 814 pubs.
Tim Martin, the Wetherspoon chairman, said: “Wetherspoon, like the hospitality industry, has seen a consistent but slow recovery following the pandemic. Although inflation is, in general, reducing, labour and energy costs are far higher than pre-pandemic. A main issue for the pub trade is that labour costs are around 30% of sales, compared to around 10% for supermarkets.”
JD Wetherspoon share price.
The JD Wetherspoon share price fell 1.71% to trade at 821.0p from Tuesday’s closing price of 835.3p.
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