JD Wetherspoon feeling the squeeze

13th Jul 2011 07:48

The froth was blown off the top of the JD Wetherspoon share price Wednesday morning as the company issued disappointing like-for-like (lfl) sales growth figures.For the 11 weeks to 10th July 2011, like-for-like sales increased by 1.6%. Broker Panmure Gordon has forecast lfl sales growth of 2.8% while Peel Hunt had been expecting growth of at least 3%.Total company sales over the same period increased by 7.1%. In the financial year-to-date (50 weeks to 10th July 2011), like-for-like sales increased by 2.2% and overall company sales increased by 7.5%.The company said it currently expects to report a pre-exceptional items operating margin for the second half of the financial year of around 9.5%.The company statement harped on a familiar theme of rising costs for a wide range of goods and services, combined with a reduction in disposable income for many of its customers. "Sales and cash flow continue to be resilient and the performance of our recently opened pubs remains encouraging, which should enable the company to produce a reasonable outcome in the current financial year," the statement said.On the day of the interim management statement the shares opened 7.4p lower at 435.10p.--jh