UK's Marston's sales slowdown casts cloud, shares fall
Marston's Reports Lower Sales Amid Market Challenges
First Half Performance and Market Reaction
May 12 (Reuters) - British pub operator Marston's reported lower sales for the first half of its financial year and in the weeks since, hurt by soft demand and refurbishment-related closures, which overshadowed the company's confidence in its outlook and sent its shares down as much as 10.6%.
Marston's has been rolling out new pub formats in a push to become a pure‑play pub operator, while maintaining tight cost control, hoping that upgraded sites and refreshed menus will drive footfall in the summer and ahead of the soccer World Cup which kicks off in June.
The company, which owns more than 1,300 pubs across Britain, said like-for-like sales were down 1.5% over the 31 weeks of its year so far, following a stronger comparable period last year, which gained from holidays and warmer weather.
Analyst Commentary
"While the soft LFL (like-for-like) growth in April could be seen as a negative read to the broader UK Pubs space, this should not come as a total surprise," JP Morgan analysts said.
Shares in Marston's were down about 7% at 0907 GMT, with peers JD Wetherspoon and Mitchells & Butlers down 1.2% and 1.9%, respectively.
Financial Results and Outlook
Profit and Sales Figures
COSTS MANAGEABLE, OUTLOOK MAINTAINED
Underlying pretax profit rose 7.9% to 20.5 million pounds ($27.8 million) for the 26 weeks ended March 28, while like-for-like sales dipped 0.5%.
Sector Pressures
Surging energy prices linked to the Iran war have added to pressures on Britain's hospitality sector, already struggling with weak consumer spending as households face higher prices for essentials from food to fuel, and companies look to cut costs.
Company Strategy and Future Plans
The company still kept its annual outlook, as it said cost pressures were "manageable."
"Looking forward, we are very well positioned for the World Cup summer ahead and expect our pubs, especially our new Grandstand formats, to be in high demand," CEO Justin Platt said, referring to sports-focused pubs.
The company said electricity prices were hedged for fiscal 2026 and gas through fiscal 2027.
Additional Information
($1 = 0.7382 pounds)
(Reporting by Nithyashree R B in Bengaluru; Writing by Pushkala Aripaka Editing by Sonia Cheema and Keith Weir)
