J D Wetherspoon shares fell on Wednesday after the group said profits for the year would miss expectations due to slower-than-expected sales and rising costs.
Wetherspoon’s reported like-for-like sales growth of 4.0% for the 12 weeks to 19 July, with year-to-date sales up 4.2%, but this was lower than the company had hoped.
In a short trading statement, the firm outlined growing pub numbers and cash returns to shareholders.
The company has opened eight managed pubs and sold nine in the year to date, taking its estate to 793, while its franchise model continues to build with 15 openings this year bringing the total to 23 franchised sites.
Wetherspoon’s has continued to return cash to shareholders, buying back 6.4 million of its own shares for cancellation at an average price of £6.52. It has also spent £12.2m purchasing the freehold reversions of four pubs, taking total expenditure on freeholds since 2011 to £489m.
The chairman of Wetherspoon, Tim Martin, said:”Profits for the year are likely to be below market expectations, with marginally lower sales than anticipated in the final quarter, combined with higher costs in the areas of food, labour, repairs, energy and business rates.”
Year-end net debt is expected to be around £720m, in line with the end of the last financial year. Preliminary results are due on 2 October.