JD Wetherspoon shares surge with sales set for full-year record

JD Wetherspoon shares surged Wednesday after the company reported bumper trading in the most recent period and breached previous sales records.

Wetherspoon’s like-for-like sales increased by 9.1% in the 13 weeks to 30 April 2023 as the pubs group recorded their best Easter trading period in terms of sales. Wetherspoon also said they had the busiest Saturday ever on the first May bank holiday.

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The company said they expected sales for the full year are expected to be their highest on record.

JD Wetherspoon shares were trading over 7% higher at the time of writing on Wednesday.

“JD Wetherspoon has seen a further acceleration in its sales growth, with trading now firmly ahead of pre-pandemic levels. With an extra bank holiday in the last quarter, it’s likely to finish the year with a flourish,” said Derren Nathan, head of equity research at Hargreaves Lansdown.

“There will be a fizz of disappointment after the chain indicated that people preferred to stay at home and celebrate the Coronation rather than watch it in the pub.”

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“Wetherspoon’s value proposition is holding it in good stead as the cost-of-living crisis continues and the action to bring debt down and optimise its portfolio of pubs is the right move.”

Derren Nathan continued to caution that although the company is heading for a record year, Wetherspoon shares are currently highly valued on an earnings basis.

“However, top line growth won’t necessarily drive a similar uplift in profits, with Tim Martin noting that inflationary pressures had become ‘intractable’, which is likely to weigh on investors’ minds. With the valuation now approaching 30x forward earnings its looking a little vulnerable, particularly if the green shoots seen in consumer sentiment don’t continue to germinate.”

JD Wetherspoon noted net debt was approximately £67m lower than before the beginning of the pandemic, having invested £185m in new pubs.

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