J D Wetherspoon – Sales Rebound, But Not To Pre-Pandemic Levels

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J D Wetherspoon plc (LON:JDW)’s like-for-like sales in the 25 weeks to January were up 13.1%, but 0.7% lower than pre-pandemic levels. The last 12 weeks of the year included the important Christmas trading period, which last year was impacted by the Omicron outbreak. LFL sales for this period were 17.8% higher year-on-year, 2% lower than the same period immediately before the pandemic.

J D Wetherspoon significantly outperformed the wider market in December, but cautioned that costs for the industry have risen steeply, particularly for labour, food, energy and maintenance.

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Net debt as at 22 January was £745m unchanged from the level reported in November 2022.

The company remains cautiously optimistic for the rest of the year.

The shares were unmoved in early trading.

J D Wetherspoon's Sales Rebound

Derren Nathan, Head of Equity Research at Hargreaves Lansdown

“It’s no surprise that pubgoers were back in force during a restriction-free Christmas but J D Wetherspoon’s sales are still lagging pre-pandemic levels. Given the multiple hits consumers are having to their spending power, it may be some time before genuine sales growth returns. And given the cost increases being seen across the industry, this is going to hurt the bottom line.

That said, J D Wetherspoon’s value offer is helping it to outperform its peers, and the recent steps it’s taken to shore up the balance sheet leave it well placed to ride out the storm. As the clouds continue to darken for the hospitality sector, it may be a case of last man standing.

Wetherspoon will in our opinion no doubt survive, and indeed prosper with increased market share for when the cycle turns.  But in the short term, the news could well get worse before it gets better”.