By Scott Kanowsky
Investing.com -- J D Wetherspoon PLC (LON:JDW) has warned that it will report a higher than expected full-year loss, citing a spike in labor costs that offset a recovery in sales to near pre-pandemic levels.
The U.K. pub chain now expects to post an annual loss of £30M after accounting for exceptional items, as an uptick in expenses related to repairs and marketing also weighed on the company's performance. Wetherspoons CEO Tim Martin previously predicted that profits would "break even" during its current financial year.
London-listed shares in Wetherspoons slumped by 7% in early trading on Wednesday.
In a trading update, the company also said like-for-like sales in the first 11 weeks of the fourth quarter were -0.4% below the level seen during the same period in 2019. On a quarterly basis, sales improved from -4%.
"Many people predicted a boom in pub sales when lockdowns and restrictions ended, due to pent-up demand, but recovery for many companies has been slower and more laborious than was anticipated," Wetherspoon's said in a statement.
Martin also renewed his criticism of pandemic-era government policies, saying they have led to "many unintended consequences," including lower foot traffic for hospitality and transport businesses. He also blamed a recent spike in consumer prices on government stimulus programs.
"Inflation, mainly a result of the 'money printing' which was activated by governments and central banks to finance lockdowns, has proved to be far higher and more intractable than anyone anticipated," Martin said.
However, he added that Wetherspoons remains "cautiously optimistic" about its outlook.