JD Wetherspoon cuts profit forecasts as rising costs erode sales gains

JD Wetherspoon has trimmed its profit expectations after higher energy, wage and repair costs offset steady like-for-like sales growth. The pub group also confirmed a fresh round of openings and disposals as it reshapes its estate.

JD Wetherspoon has lowered its full-year profit outlook after a surge in operating costs wiped out the benefit of modest sales growth, according to a trading update and analyst briefing from Peel Hunt.

Like-for-like sales rose by 3.7% in the first quarter and by 6.1% in the second quarter, with growth of 4.7% recorded after 25 weeks. The broker said this included a 6.9% increase in drink sales, a 1.3% rise in food sales, a 9.1% increase in machines and a 0.7% rise in accommodation.

Despite this progress, Peel Hunt cut its 2026 pre-tax profit forecast by 3.3%, citing higher energy, wage and repair costs. “Costs have been higher than anticipated, with energy, wages, repairs and business rates, for example, increasing by £45 million in the first 25 weeks,” a Peel Hunt analyst said.

The broker added that higher sales and lower interest costs were not sufficient to offset the pace of rising expenses, leaving the company expecting a full-year trading outcome slightly below that achieved in the previous financial year.

Six new pubs open as estate is reshaped

JD Wetherspoon opened six pubs in the first 25 weeks of the year and still plans to open a total of 15 in the current financial year.

Alongside the openings, six pubs have been sold for £3.3 million, while a further six have been opened and 16 are now operating under franchise. Eight of those franchise sites opened in the year to date. The company expects to open 15 company-owned pubs and 18 to 23 franchised pubs this year, with franchised income expected to be immaterial in the near term.

Christmas and January trading steady

Christmas trading delivered like-for-like sales growth of 8.8%, according to Peel Hunt. The January sale, which included discounted pints of Worthington’s at 99p, also produced firm results and supported sales momentum into the new year.

The broker said these trends prompted a modest increase in its target price from 700p to 750p, though its recommendation remained at hold due to ongoing margin risk and valuation concerns.

Valuation and outlook

JD Wetherspoon’s average share price discount to the sector reached 34% in September 2025, reflecting a longer-term strategy of raising prices by around half the sector average in percentage terms.

While the broker views the current valuation as fair, it said the near-term trading environment for travel and hospitality remains challenging. However, it added that recent developments suggest the government may be starting to listen to industry concerns, with the potential for a reduction in business rates offering some longer-term relief.

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