In key news on UK stocks, J D Wetherspoon PLC (GB:JDW) shares fell by nearly 3% as of writing after the company reported a slowdown in its sales growth in the 10 weeks of its fourth quarter of FY24. The company reported a 5.8% increase in like-for-like sales during this period, down from 11% in the same period last year. Like-for-like sales grew by 7.7% year-to-date.
J D Wetherspoon operates a network of pubs and hotels across the UK and Ireland.
Key Insights from Wetherspoon’s Update
According to the update, Wetherspoon’s performance was mainly impacted by rising costs of raw materials and labour. That said, the company noted an ongoing, gradual recovery in sales and profits that began following the pandemic. Wetherspoon’s sales per pub are around 21% above pre-pandemic levels, which has helped it mitigate the significant rise in costs.
Year-to-date, the company has disposed of 26 pubs, which were smaller and older or located near another pub. The disposals generated a net cash inflow of £8.7 million. Currently, the company operates 801 pubs.
In terms of outlook, Wetherspoon expects its annual profits for FY24 to be in line with market estimates.
Jefferies Analyst is Bullish
Following the update, analyst James Wheatcroft from Jefferies praised Wetherspoons efforts in terms of competitive pricing and strategic locations, noting that these factors will further help the company capture a larger market share.
Wheatcroft has a Buy rating on JDW stock, predicting an upside of 21%.
Is Wetherspoons a Good Share to Buy?
According to TipRanks’ analyst consensus, JDW stock has a Moderate Buy rating based on four Buy and two Hold recommendations. The J D Wetherspoon share price forecast is 901p, which is 20% higher than the current trading levels.
