Wetherspoon profits fall despite sales growth as costs continue to weigh on pubs

J D Wetherspoon has reported a 28% fall in pre-tax profit for its latest financial year, despite a 5.2% increase in revenue and continued like-for-like sales growth across its pub estate.

The pub operator reported revenue of £2.24bn for the 52 weeks to 26 July 2026, up from £2.13bn a year earlier, while like-for-like sales increased by 4.2%.

However, profit before tax and separately disclosed items fell from £81.4m to £58.6m, with the company attributing the reduction primarily to higher operating costs.

Operating profit before separately disclosed items fell 17.9% to £120.2m, compared with £146.4m in the previous financial year. The company’s operating margin declined from 6.88% to 5.37%.

Wetherspoon said operating costs increased by 5.3%, including additional wage costs of £46m, repairs costs of £31m and business rates of £9m.

The company’s financial results show that sales have continued to grow since the pandemic, with FY26 revenue 23% higher than in FY19. However, Wetherspoon said costs including energy, repairs and wages have increased at a faster rate than sales over the same period.

Energy costs were 77.4% higher than in FY19, repairs were up 84.5% and wages had increased by 64.4%, while sales per pub were 36.6% above their pre-pandemic level.

Like-for-like sales rise 8.6%

The company said trading has started strongly in the new financial year.

Like-for-like sales increased by 8.6% during the nine weeks to 27 September 2026. Wetherspoon said the performance had been helped by unusually warm weather and increased investment in beer gardens and outdoor seating.

The company also reported that its like-for-like sales growth of 7.7% in August compared with industry growth of 0.8%, according to the NIQ RSM Hospitality Business Tracker.

Wetherspoon said this represented the 48th consecutive month in which its like-for-like sales had outperformed the tracker.

The operator cautioned, however, that some of the recent improvement was weather-related and therefore unlikely to be sustained at the same level.

It currently expects profit before tax and separately disclosed items for FY27 to be in line with market expectations, which the company puts at £74m.

Pub estate remains broadly stable

Wetherspoon ended the financial year with 792 managed pubs, two fewer than the previous year and 87 fewer than in FY19.

During the year, eight managed pubs opened while 15 properties were disposed of, including 10 trading pubs and five non-trading properties.

The company plans to open approximately 15 managed pubs during the current financial year, excluding franchises.

Its franchised estate also continues to expand. Fifteen franchised pubs opened during FY26, taking the total to 23, with a further 15 to 20 franchise openings anticipated during the current financial year.

Capital investment fell to £74.2m from £117m the previous year, although investment in new pubs and pub extensions increased to £28.7m from £24.1m.

Wetherspoon renews call for tax reform

Chairman Tim Martin used the results statement to renew the company’s criticism of the tax and regulatory burden facing the hospitality sector.

Wetherspoon said that government-led tax and cost increases, including National Insurance and energy-related and environmental charges, had placed pressure on the industry.

The company again called for greater VAT parity between hospitality businesses and supermarkets, arguing that supermarkets pay little or no VAT on many food sales while pubs and restaurants generally charge the standard 20% rate.

Wetherspoon has campaigned for VAT reform for many years and said it had continued to support the ‘VAT’s The Problem’ campaign, which calls for a reduction in hospitality VAT from 20% to 10%.

Martin said the hospitality sector had “borne the brunt” of government-led tax and regulatory cost increases, and argued that further increases should be avoided.

He also repeated the company’s view that VAT is a major factor in the price differential between the on- and off-trades.

These are Wetherspoon’s stated views rather than independent conclusions contained in the company’s financial results.

£891m tax contribution

Wetherspoon said the company, its employees and customers generated £891m in UK taxes during FY26.

The figure includes VAT, alcohol duty, PAYE and National Insurance, business rates, corporation tax and other taxes and levies.

According to the company’s figures, Wetherspoon has generated £6.6bn in UK tax contributions over the past decade.

The company said its total tax contribution in FY26 was equivalent to approximately 39.8% of net sales.

Cash flow improves

Despite the reduction in accounting profit, Wetherspoon reported a significant increase in free cash flow.

Free cash inflow increased to £100.1m from £56.6m in FY25. The company said this benefited from a £33.5m increase in working capital, with underlying free cash flow, after adjusting for working-capital movements, at £66.6m compared with £72.6m a year earlier.

Net debt excluding IFRS 16 lease liabilities stood at £715.8m at the year end, compared with £724.3m a year earlier.

The company maintained its total annual dividend at 12p per share.

Wetherspoon also bought 6.96 million shares for cancellation during the year at a total cost of £46m.

The new financial year comprises 53 trading weeks, ending on 1 August 2027, with Wetherspoon’s next trading update due on 4 November 2026.