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UK pub chain JD Wetherspoon (JDW.L) reported a rise in quarterly sales, with trading helped by sunny weather.
Shares in the FTSE 250 (^FTMC) company were little changed shortly after the market open in London on Wednesday morning, despite the firm posting a 5.6% increase in like-for-like sales in the third quarter, compared to the same period last year.
Total sales rose by 5% in the quarter, which the company said were slightly less than like-for-like sales as a result of a small number of pub disposals.
"Bearing in mind that recent trading has been helped by favourable weather, the company anticipates a reasonable outcome for the financial year, notwithstanding previously reported wage and tax increases of approximately £1.2m per week," said Tim Martin, chairman of JD Wetherspoon, in a trading update on Wednesday.
Martin had already warned of the impact of higher labour costs as a result of increases to employer national insurance contributions and the national minimum wage, which were announced in the autumn budget and came into effect in April.
JD Wetherspoon opened two pubs and sold seven year-to-date, with plans to open a further four or five pubs this financial year and around 10 pubs in the following financial year.
The company now operates 795 pubs, with an additional seven pubs operating under a franchise agreement.
JD Wetherspoon said it expected to have a year-end net debt of between £720m and £740m, with headroom of approximately £200m.
Martin said that the company had invested in new staff facilities in 520 pubs, with 270 planned for the future, costing approximately £100,000 per pub.
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In terms of its product range, Martin said the pub chain had recently started selling Jaipur traditional ale from the Thornbridge Brewery, Kronenbourg 1664 Biere and Poretti.
"As regards the menu, new initiatives include a gourmet burger offer, which has proved extremely popular in the pubs in which it has been trialled," he added.
Dan Lane, lead analyst at Robinhood UK, said: "Sales are in a good place and there is a clear focus on getting the pub count up but also making sure these are quality sites that the UK public wants to go to. Slowly does it though, as the property footprint still sits slightly below the 800 mark, against the 1,000 the group has previously targeted."
"Debt is still high but the market has shrugged that off over the past month, pushing shares higher even as US tariffs have taken centre stage," he said. "The reality is that Spoons is unlikely to fall foul of any US exporting taxes and serves a domestic customer base that has kept its interest despite inflationary pressures."