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Wetherspoon to Post Pandemic-Induced First-Half Loss

British pubs group J D Wetherspoon (LON: JDW)  warned on Wednesday it would post a loss for the first half of the fiscal year after the Omicron variant led to new restrictions and kept people out during the holidays. 

Sales Hurt By Restrictions 

The company said like-for-like sales fell 11.7% and total sales 13.3% in the 25 weeks to January 16 as second-quarter sales were hit by restrictions imposed by Britain in December. 

In the 12 weeks to January 16, 2022, like-for-like sales fell 15.6% and total sales fell 16.6% compared to the same period last year. 

Commenting on revelations that a number of parties took place at 10 Downing Street during the lockdown in 2020, Wetherspoon said the parties highlighted the consequences of lockdowns and pub closures.

Outlook 

J D Wetherspoon chairman Tim Martin, said, “As mentioned in our update on 13 December 2021, the uncertainty created by the introduction of plan B Covid-19 measures makes predictions for sales and profits hazardous. The company will be loss-making in the first half of the financial year, but hopes that, with the ending of restrictions, improved customer confidence and better weather, it will have a much stronger performance in the second half.” 

Wall Street’s Take

Two months ago, Jefferies analyst James Wheatcroft kept a Buy rating on JDW while lowering its price target to 1,300p (from 1,675p). This implies 40% upside potential. 

Overall, JDW scores a Moderate Buy analyst consensus rating based on two Buys and three Holds. The average J D Wetherspoon price target of 1,112.50p implies 19.8% upside potential to current levels. 

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