- Festive like-for-likes up 6.1%
- Year-to-date sales up 4%
- £60 million extra labour costs expected
Pubs group JD Wetherspoon (JDW) reported strong trading over the festive season with like-for-like sales up 6.1% over the three weeks between 16 December 2024 to 5 January 2025.
In the last 12-weeks, representing Wetherspoon’s financial second quarter, like-for-like sales growth slowed to 4.6% compared with a year ago. Total sales were 4% higher year-to-date reflecting disposals.
Mr. Market was not overly impressed by the trading update, with the shares falling 7p or just over 1% to 604.5p, which means they are down around 29% over the last 12-months.
STRONG CHRISTMAS TRADING ALL ROUND
To be fair, it would probably have taken blow-out numbers to impress given all five listed pub groups have already reported, with Marston’s (MARS) this week (21 Jan) revealing record Christmas Day sales.
As the table shows, double-digit like-for-like sales growth was the norm with records also broken at Young’s (YNGA:AIM), showing that despite cost of living pressures, punters were happy to splash-out for Christmas.
It is worth noting that the numbers are not strictly comparable, with each company using slightly different dates to define the period, but it does show the general trend.
CHALLENGING OUTLOOK
While Christmas was a clear success, the prospects for the rest of the year look less inspiring, with pubs facing increased National Insurance costs and an increase in the National Living Wage.
Looking ahead Wetherspoon’s chairman Tim Martin said: ‘From 1 April 2025 labour-related costs at Wetherspoon will increase by around £60 million per annum.
‘The company is confident of a reasonable outcome for the year, although forecasting is more difficult, given the extent of the increased costs.’
Wetherspoon has a trading estate of 796 pubs and plans to open nine pubs in the financial year including sites at London Bridge station, Fulham Broadway underground station and Manchester Airport.
EXPERT VIEW
Russ Mould, investment director at AJ Bell, commented: ‘The latest update from Wetherspoons was solid rather than spectacular with the pubs group enjoying a more subdued festive period than some of its peers.
‘This could reflect the more everyday charms of a Wetherspoons – a place to get cheap grub and drinks rather than somewhere to necessarily celebrate special occasions. In the longer term that is not a bad place for the business to be, given Christmas comes around only once a year.’
Disclaimer: Financial services company AJ Bell referenced in the article owns Shares magazine. The author (Martin Gamble) and the editor (James Crux) own shares in AJ Bell.
