JD Wetherspoon sank into the red after a surge in sales over the summer came to an end.
As Britain basked in warmer weather, the FTSE 250 café chain said sales in August and September — the first nine weeks of the fiscal year — were 1.5 percent higher than the same period of 2019.
But in the next five weeks to November 6, sales fell 1.1 percent from 2019 — the year before the pandemic hit.
Slowing trading: FTSE 250 cafe chain JD Wetherspoon said in the five weeks to Nov. 6, sales fell 1.1% from 2019 — the year before the pandemic hit
Wetherspoons also warned that personnel, food and repair costs were “significantly higher” than a year ago.
And while it has cut its debt from £892 million at the end of July to £745 million, its interest bill is expected to be £10 million higher this year as borrowing costs rise.
The company, which has 847 pubs, said seven more will hit the market in addition to the 32 that recently went on sale.
Chairman Tim Martin said the chain “remains cautiously optimistic about future prospects.”
Derren Nathan, head of equity research at Hargreaves Lansdown, said: “We’ll have to hold our breath to find out if the more recent slowdown is an outlier or a trend as customers feel their wallets increasingly strained.
“With cafe sales accelerating and efforts to dent the debt burden, it feels like the cafe chain is closing the shutters, and that might be a wise move.”
Peel Hunt downgraded its rating to “hold” from “add” and cut the target price on 600p Wetherspoon shares from 550p. The stock plunged 6.3 percent or 30.8 pence to 457.4 pence.
The FTSE 100 fell 0.14 percent or 9.89 points to 7296.25 and the FTSE 250 fell 0.26 percent or 48.89 points to 18,649.
Stock Watch – The Gym Group
Shares in The Gym Group plummeted on concerns about the shift to hybrid work.
The company, which owns 224 gyms, said there was a “structural shift in work patterns” after the pandemic hit 16 gyms that rely on office workers.
It warned that energy costs could rise by up to £10 million next year.
Sales rose 78 percent in the ten months to October to £143.2 million.
And membership reached 838,000, up 16 percent from December last year.
But shares fell 17.3 percent, or 21.4p, to 102.2p.
Wall Street faltered as uncertainty over the outcome of the highly controversial midterm elections weighed on the vote.
The Dow Jones Industrial Average fell 1.95 percent, the S&P 500 fell 2.08 percent and the Nasdaq was down 2.48 percent.
Analysts suggested, however, that markets may pick up, with the S&P making gains in every 12-month period after a midterm vote since World War II, regardless of the outcome.
“There’s a good chance we’ve divided the government,” said Art Hogan, chief market strategist at B Riley Financial in New York.
“The general rule of thumb when it comes to markets is a stalemate: fewer policy changes and fewer risks for individual sectors.”
In London, US elections took their toll on gambling stocks after California voters rejected a proposal to allow online sports betting. It came as Flutter’s revenues rose 31 percent in the three months to September to £1.9 billion, while the US division brought in £614.3 million.
But Flutter fell 2.7 percent or 320p to 11465p, while online gambling group 888 fell 3.5 percent or 3.6p to 99.7p and owner of Ladbrokes and Coral, Entain, fell 1.5 percent or 20p to 1304.5p. .
FirstGroup fell 9.9 percent, or 10.6 pence, to 96.3 pence after the Aberdeen-based bus and train company warned it could be impacted by falling consumer spending and the rail strikes.
The group, which faced a takeover approach this year from a US private equity firm, saw its turnover fall to £2.2 billion in the 26 weeks to September, from £3.1 billion a year earlier.
Taylor Wimpey became the latest homebuilder to warn of a cooling demand as mortgage rates rise.
The developer saw 24 percent of home purchases canceled in the second half of its fiscal year — up from 14 percent in 2021 — as the economic environment deteriorated. Shares rose 2.1 percent, or 2p, to 97.9p.
Ithaca Energy fell 8 percent, or 20p, to 230p after the North Sea oil producer floated its shares at 250p in the largest listing on the London Stock Exchange yet this year.
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