6th May 2015 10:38
LONDON (Alliance News) - JD Wetherspoon PLC Wednesday said its like-for like sales in the third quarter of its financial year increased by 1.7%, while total sales were up by 5.8%, but its operating margin fell from the corresponding period last year.
In a statement, the pub chain said that its operating margin in the 13 weeks to April 26 was 7.5%, narrowed from 8.0% in the corresponding period of the prior year but improved from 7.4% in the first half of the financial year to January 25. Wetherspoon said it expects its operating margin to be in the region of 7.3% to 7.7% for the full-year ending in July.
JD Wetherspoon attempted to boost early morning food sales in March through discount-driven coffee and breakfast campaigns, but analysts at Numis are unsure whether the resultant volume growth will be sufficient to offset the inevitable hit on margins.
Shore Capital is more positive, however, saying that the 7.5% operating margin was ahead of its expectations of 7.3% for the whole of the second half.
The pub chain said like-for-like sales increased by 3.6% and total sales increased by 7.9% in the 39 weeks to April 26, but said that while expectations for the full-year are unchanged, it is "difficult to quantify" what will happen in the next financial year.
JD Wetherspoon had previously said that a strong second half to its previous financial year will make it hard to improve on that showing in the current year. It also reiterated that pubs are at a disadvantage to supermarkets due to levies and taxes imposed on them.
"For the next financial year, there are a number of factors which are likely to influence our trading performance, although they are difficult to quantify at this stage. Positive aspects include an increase in our pub numbers, stable utility prices and slightly lower interest rates. Other trends include increased competition from supermarkets and restaurant groups, together with additional staff and repair costs. We will provide updates, when appropriate, on these, as next year progresses," JD Wetherspoon said.
Shares in Wetherspoon are up 4.1% at 766.00 pence late Wednesday morning, the fourth leading gaining in the FTSE 250.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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