British pubs group J D Wetherspoon (LON: JDW) warned on Wednesday it would post a loss for the first half of the fiscal year after the Omicron variant led to new restrictions and kept people out during the holidays.
Don't Miss Our New Year's Offers:
- Discover the latest stocks recommended by top Wall Street analysts, all in one place with Analyst Top Stocks
- Make smarter investments with weekly expert stock picks from the Smart Investor Newsletter
Sales Hurt By Restrictions
The company said like-for-like sales fell 11.7% and total sales 13.3% in the 25 weeks to January 16 as second-quarter sales were hit by restrictions imposed by Britain in December.
In the 12 weeks to January 16, 2022, like-for-like sales fell 15.6% and total sales fell 16.6% compared to the same period last year.
Commenting on revelations that a number of parties took place at 10 Downing Street during the lockdown in 2020, Wetherspoon said the parties highlighted the consequences of lockdowns and pub closures.
Outlook
J D Wetherspoon chairman Tim Martin, said, “As mentioned in our update on 13 December 2021, the uncertainty created by the introduction of plan B Covid-19 measures makes predictions for sales and profits hazardous. The company will be loss-making in the first half of the financial year, but hopes that, with the ending of restrictions, improved customer confidence and better weather, it will have a much stronger performance in the second half.”
Wall Street’s Take
Two months ago, Jefferies analyst James Wheatcroft kept a Buy rating on JDW while lowering its price target to 1,300p (from 1,675p). This implies 40% upside potential.
Overall, JDW scores a Moderate Buy analyst consensus rating based on two Buys and three Holds. The average J D Wetherspoon price target of 1,112.50p implies 19.8% upside potential to current levels.
Download the TipRanks mobile app now
Related News:
Hotel Chocolat Q2 Revenue Rises 37%
Sainsbury Sales Down in Q3, Profit Target Raised
