BUSINESS LIVE: Boohoo sales drop; Wetherspoon’s raises profit expectations; The head of the workspace leaves

Charlie Huggins, Wealth Club ‘Quality Stock Portfolio’ Manager:

‘Wetherspoons appears to be moving in the right direction, after a difficult few years. Comparable sales are growing and profits are expected to be near the high end of expectations.

‘Wetherspoons benefits from moderating inflation combined with a proposition that clearly resonates with the consumer.

‘Despite higher interest rates, consumers continue to spend. However, they are becoming increasingly demanding. Wetherspoon’s commitment to low prices and getting the basics right is helping to keep punters loyal.

‘With many pub and restaurant businesses struggling, Wetherspoons has the opportunity to gain share in the current environment. With costs also coming down, it appears to be on track to continue profit recovery.’

London-based flexible office space provider Workspace Group has appointed Lawrence Hutchings as its new chief executive designate, replacing Graham Clemett, who will step down at the end of this year.

Hutchings has held the top role at UK real estate investment trust (REIT) Capital & Regional since 2017.

Disney’s streaming business has turned a profit for the first time as cost-cutting efforts begin to bear fruit.

The media titan posted a £37m profit for its Disney+ and Hulu division in the first three months of 2024, compared to a £468m loss in the same period last year.

This is the first time the unit, which produces shows such as Only Murders In The Building, has been in the black since the launch of Disney Plus in 2019.

JD Wetherspoon has forecast its profits to be at the top end of market expectations after the pub group posted higher sales in the third quarter, boosted by strong demand for its traditional beers and vodka.

The group, which owns and operates pubs across the UK and Ireland, reported a 5.2 per cent rise in like-for-like sales for the 13-week period ending April 28.

The resilience of customer spending has helped British pub groups during an uncertain economic environment, even as fears loom that customers will reduce their spending amid a high inflation environment.

Guy Lawson-Johns, equity analyst at Hargreaves Lansdown:

‘Boohoo’s annual results made painful reading for investors. Revenue declined at high double-digit rates in all regions, including 18% in the US, seen as the group’s path to significant growth.

‘For now, it remains a struggling company with a tarnished reputation, which is reflected in the group’s valuation, which has dropped significantly in recent years.

‘Executing its return to growth strategy has not been easy. And, as part of the drive towards profitability, Boohoo has invested heavily in expanding capacity overseas, where there is more room for growth.

‘International markets, especially the US, are the key to the group’s future growth, but large investments have so far delivered weak results.

“And with customer KPIs continuing to trend in the wrong direction, it doesn’t look like a miraculous recovery is around the corner.”

Parliamentarians have condemned the debanking of companies considered “undesirable.”

A report by the Commons Treasury select committee on small business banking services took aim at the “unfair” practice of denying accounts to legitimate businesses, from defense firms to slot machine operators.

Boohoo’s sales slumped 17 percent last year, sending profits down 7 percent to the lower end of guidance, as the British online fashion retailer continues to struggle amid competition from new rivals like Shein.

The group, like British peer Asos, emerged a winner during the pandemic-fueled online shopping boom but has since been hit by supply chain issues and increased product returns.

Its shares are down 24 percent year-over-year.

Boohoo, whose brands include PrettyLittleThing and Nasty Gal, posted adjusted EBITDA, its preferred profit measure, of £58.6m in the year to February 23, against guidance of £58m to £70m. million and the £63.3 million earned in 2022/23.

On a statutory basis, Boohoo’s pre-tax loss rose to £159.9m from a loss of £90.7m previously.