JDW, Molson, Campari, Peloton, US restaurant Q1s, licensing & other:

PREMIUM EMAIL – PLEASE DO NOT FORWARD:

A DAY IN THE LIFE:

I’ve concluded that blackbirds and robins have more in common than just having wings and a beak.

And yes, I’ve been told they’re both members of the thrush family but what I was referring to is the tendency of both species to attack their reflections in a mirror or, in the case of the robin, a window in which, if you really, really try, you might be able to see your own image staring back at you.

Which is what it is but, as both birds tend to poo themselves with fear when they launch themselves into the fight, it can get a bit messy.

The robin, it has to be said, isn’t much of a problem.

But the blackbird, on the other hand, seems to be a bit of a Tardis when it comes to poo production. And, as it tends to sit on the car’s wing-mirror and launch violent attacks thereon, it has a tendency to leave long and voluminous white stripes on the door.

Vertical, of course.

Not a horizontal, Starsky & Hutch effect but, despite the latter being more of a technical challenge for the bird, it wouldn’t really be a whole lot more attractive.

Anyway, have a good weekend. Weather looks great & here’s the news:

PUBS & RESTAURANTS:

Opening hours:

The government yesterday formally tweaked hours for Thursday 8 May (only), the 80th anniversary of VE Day. The order, which was announced in April, allowed premises in England & Wales that would usually have had to close at 11pm, to remain open until 1am Friday morning.

Licensing laws:

The FT reports that the major review of UK licensing law announced by the government last month and which gave new powers to Sadiq Khan, the mayor of London, is beginning to have some effect…

• The FT reports that ‘Khan will now be able to override local council decisions on late-night venues as part of a pilot programme.’ It adds that ‘the plan may already be having an impact’ saying that the decision by Westminster council to limit a late-night licence for the legendary New York jazz bar Blue Note was overturned on appeal.

• The FT writes ‘while support from the mayor’s office may help lift the spirits of London’s night-time industry, the outcome of a broader licensing overhaul is still unclear. The most immediate change might be to remove licensing guidance from the purview of the Home Office — which is largely focused on public safety — to the Department for Culture, Media and Sport, which may be more inclined to treat nightlife as a cultural asset.’

COMPANY NEWS:

Pat Val owner Flour Power Group, which owns Patisserie Valerie, has reported level sales at £25.3m for the year to 2 April 2023 but a loss of £3.6m versus a profit of £566k in the prior year.

The MCA reports that iced beverages have helped to drive sales at Black Sheep Coffee. It reports year-on-year growth of 227% for the iced beverages at the end of April 2025.

M&B owned Browns Brasserie & Bar has confirmed its restaurant in central Brighton will close this week after the group failed to extend its lease.

JD Wetherspoon yesterday commented on what it labelled a ‘highly misleading headline about Wetherspoon beer prices in The Sun. The paper reported that chairman Tim Martin was blaming Labour for an imminent 20p price hike across beers in its own units. JDW says its ‘chairman Tim Martin estimated that pint prices in the pub industry generally, as previously indicated by the British Beer and Pub Association, a pub industry organisation, would rise by about 20p….’

• It adds that ‘Mr Martin declined to comment on prices at Wetherspoon, other than to confirm that they would remain “competitive”’. The company adds ‘for the avoidance of doubt, Wetherspoon never had any plans to increase pint prices by 20p in its pubs “in days” and is unlikely to do so this calendar year.’ Tim Martin said ‘The Sun headline writer got a bit carried away. They probably went to the pub at lunchtime.’

The MCA reports that We Do Play plans to open 30 Activate sites over the next two and a half years, following a strong UK debut for the immersive concept at The O2.

Fat Hippo, the Newcastle-based restaurant operator which now operates from 17 sites (13 restaurants and 4 concessions) throughout the UK, has reported numbers for the year to 31 July 2024 to Companies House. Revenue has risen by 12.3% to £19.35m. The group’s GP% has expanded markedly from 29.6% last year to 34.4% in the year under review. EBIDTDA has risen by 97% to £1.90m. Admin expenses are up by 10% to £6.03m and, though interest charges have risen on higher rates, the group reports a PBT of £556k compared with a loss last year of £263k. There were no dividends paid during the year….

• Balance sheet: Profits during the year under review mean that retained profits have swung from a loss of £332k to a profit of £155k. Shareholders’ Funds have expanded from £1.61m to £2.09m. The balance sheet does include £743k of intangible assets (FY23: £850k) and tangible assets are therefore £1.35m (FY23: £0.76m). The group operates from leasehold sites. Fat Hippo has gross bank debt of £1.32m (FY23: £1.74m) and debt net of cash of £354k (FY23: £1.13m).

• Company comment: Fat Hippo says ‘the financial year saw a significant increase in trading across the Group as the investment into new venues in recent years has led to turnover passing the £19m mark along with an EBITDA of £1.9m.’ It adds that ‘the directors and management team have worked extremely hard to ensure not only margins are maintained but both quality and services levels remain at a high level across the Group.’ It says it ‘is set to add to the existing estate in 2025 and 2026 with new venues set to complement the existing portfolio.’ Fat Hippo concludes that ‘the strategic plan to continue to grow the business by opening profitable and exciting new sites in different locations throughout the UK.’

Molson Coors Beverage Company yesterday reported Q1 numbers saying that net sales decreased 11.3% reported and 10.4% in constant currency. It adds that U.S. GAAP income before income taxes decreased 41.1% to $156.3 million and says that underlying (Non-GAAP) income before income taxes decreased 49.5% in constant currency to $131.1 million….

• The company went on to report that its forecasts for the full year were being edged back saying, at the net sales line, it now expects a ‘low single-digit decline on a constant currency basis, compared to low single-digit increase, previously.’ It adds that it will see income before taxes in ‘low single-digit decline on a constant currency basis, compared to mid single-digit increase, previously.’

• CEO Gavin Hattersley says ‘the macroeconomic environment and its broad effects on the beer industry and consumer, as well as competitive pressures in EMEA&APAC, impacted our financial results in the first quarter.’ He adds ‘additionally, in the quarter we saw expected headwinds, namely cycling the prior year’s significant inventory build in the U.S., the discontinuation of our contract brewing arrangements in the Americas, and transition fees related to Fever-Tree.’

• The Molson CEO continues ‘the global macroeconomic environment is volatile. Uncertainty around the effects of geopolitical events and global trade policy, including the impacts on economic growth, consumer confidence and expectations around inflation, and currencies has pressured the beer industry and consumption trends. Given the uncertainty is ongoing, we have adjusted our 2025 full year guidance.’

• The company says ‘we remain focused on controlling what we can control’ and adds ‘we are taking actions to help mitigate the short-term challenges in these uncertain times like reducing non-business critical discretionary spend and capital projects while continuing to support the medium and long-term health and growth objectives of the company.’

• CFO Tracey Joubert says ‘we are committed to protecting and growing our Underlying Free Cash Flow while making prudent capital allocation decisions that support our strategic growth initiatives and allow us to return cash to shareholders through a growing dividend and continued share repurchases.’

Papa John’s International in the US has reported Q1 numbers saying that LFL sales in North America ‘were down 3% from a year ago as Domestic Company-owned restaurants were down 5% and North America franchised restaurants were down 2%.’ International LFL sales were up 3% compared with the prior year quarter….

• Papa John’s opened 47 new restaurants systemwide. Sales system-wide were $1.22 billion, up 1% on the same quarter last year. Total revenues were $518 million, also up 1% compared with the prior year quarter.

• Thin margins mean that net income was $9 million compared with $15 million in the prior year first quarter. Adjusted EBITDA was down to $50 million compared with $61 million in the prior year quarter.

• Despite what looks like a clear move backwards, CEO Todd Penegor says ‘we are pleased with our continued progress in the first quarter to advance our transformation as we execute against our five key priorities.’ He says ‘first quarter results were in line with our expectations, and we are confident we have the right team and strategy to grow restaurant sales, generate sustainable profits throughout the system, and build long-term value for all of our stakeholders.’

Krispy Kreme has also reported Q1 numbers. It says that net revenues were $375.2 million, down 1.0% on last year. The company reports a GAAP net loss of $33.4 million and adjusted EBITDA of $24.0 million…

• CEO Josh Charlesworth says ‘we are taking swift and decisive action to pay down debt, de-leverage the balance sheet and drive sustainable, profitable growth.’ He adds ‘while we expect the macro environment to remain challenging, we are focused on positive cash flow, higher returns on capital, and our two biggest opportunities: profitable U.S. expansion and capital-light international franchise growth.’

Burger King and Tim Hortons brand owner Restaurant Brands International reports Q1 numbers saying that consolidated system-wide sales grew 2.8% year-over-year with international markets up 8.6% and North America sales less buoyant…

• RBI says that comp sales are up 0.1% ‘or over 1% adjusting for Leap Day’. The company reports total sales of $2.11bn vs $1.74bn and net income from continuing operations down to $223m from $328m.

• CEO Josh Kobza says ‘we are making solid progress executing the fundamentals of our business, despite a slower start to the year.’ He adds ‘we’re seeing encouraging momentum in Q2 and combined with responsible cost management, are on track to deliver stronger results through the balance of the year and achieve at least 8 percent organic adjusted operating income growth in 2025.’

Campari has reported Q1 numbers saying that sales fell by 4.2% organically to €666m with reported sales up by 0.2%. The company reports EBIT of €136m, down 17.2% organically and 10.2% on a reported basis…

• CEO Simon Hunt says ‘we are maintaining a prudent approach given the current uncertain operating environment, affected also by tariff threats. There was a soft start to the year impacted by heightened macroeconomic volatility in our smallest and lowest seasonality quarter, Easter timing in EMEA and logistic delays in the US market.’

• The CEO adds ‘at the same time, our outperformance in sell-out is continuing across most geographies, which demonstrates the strength of our brands. Looking forward, we confirm that our previously provided guidance for 2025 remains our target, while recognising that visibility is low.’ He adds ‘we remain confident in the delivery of long-term sustainable growth by leveraging our powerful brand portfolio including accelerated geographic expansion utilising our existing footprint and focusing on the quality of commercial execution and pricing discipline.’

• Re the remainder of FY25, the company says ‘in the current uncertain macroeconomic environment and low visibility, the economic pressure on consumers and the uncertainty on the trade in connection with tariffs continues. In this backdrop, Campari Group remains prudent for the short-term and is focusing on the controllable including deleverage and cost management as well as commercial execution and pricing discipline with focus on portfolio streamlining while not foreseeing acquisitions.’

• It says it ‘is targeting to achieve the previously provided guidance on the March 4th, 2025 while recognising that the visibility is low.’ Over the medium term, the company says it confirms its guidance. The company says it ‘expects to continue to achieve outperformance vs competition and market share gains leveraging its strong brands in growing categories with a gradual return in the medium-term to mid-to-high single digit organic net sales growth trajectory in a normalised macro environment, before impact of potential tariffs.’

Texas Roadhouse has reported numbers for the 13 weeks to 1 April saying that revenues rose by 9.6% to $1.448bn with net income up 0.4% at $113.7m . The company reports EPS up to 170c from 169c in the same quarter last year…

• In contrast to some other US operators reporting yesterday, Texas Roadhouse reports ‘comparable restaurant sales increased 3.5% at company restaurants.’ It adds that ‘restaurant margin dollars increased 4.7% to $239.3 million from $228.4 million in the prior year primarily due to higher sales.’ And adds that eight company restaurants were opened in the period.

• CEO Jerry Morgan reports ‘during this period of economic uncertainty, as always, we remain focused on the fundamentals of our business and on what we can control, which is creating an environment where our Roadies want to work and our guests want to dine.’

• The CEO says ‘we continue to consistently grow our business through new store development’ and adds ‘we are committed to our proven capital allocation strategy of utilizing operating cashflow to fund our development pipeline, maintain our existing restaurants, and pursue franchise acquisitions while also returning capital to our shareholders through the payment of quarterly dividends and share repurchases.’

• Re the outlook, the company says that ‘comparable restaurant sales at company restaurants for the first five weeks of our second quarter of fiscal 2025 increased 5.0% compared to 2024. In addition, the Company implemented a menu price increase of approximately 1.4% in early April.’

Tata Starbucks, the Indian JV, is reported to be targeting 1,000 stores in the geography by 2028. The company reports ‘given the traffic movement that we were seeing, we have tempered our outlet opening a bit. But overall, we remain the largest coffee operator in the country.’

HOLIDAYS & LEISURE TRAVEL:

Sky News reports that the chair of Severn Trent is to be appointed chair also of Premier Inn owner Whitbread.

An interim report has failed to conclude just what was responsible for the fire that shut down Heathrow Airport in March.

BTN Europe reports tht PE firm Tristan Capital Partners is to acquire budget hotel brand easyHotel in a deal reportedly worth some €200 million.

Air bookings platform Sabre reports a 3% drop in bookings in Q1. The company refers to a ‘broad softness globally’ but adds that it is seeing ‘recent improvements in general market trends.’

The FT reports that ‘Mexico is reaping the benefits of a US travel boycott by Canadians angry at the policies of President Donald Trump, with visitor numbers soaring as airlines add new flight routes into the country….’

• The number of Canadian residents visiting Mexico climbed 15.6 per cent in March compared with the same month in 2024, according to the Mexican Secretary of Tourism. Canadian air travel to the US fell 13.5 per cent over the same period.

Shares in Uber rival Lyft rose by around 7% yesterday in the US as the company beat Q1 estimates. It reported that revenues rose by 14% to $1.45bn with EPS up to 24 cents against estimates of around 19 cents…

• The company said that gross bookings  rose by 13% year-over-year to $42 billion with the number of rides up 16%, to 218.4 million. CEO David Risher says ‘Q1 marked Lyft’s 16th consecutive quarter of double-digit year-on-year gross bookings growth, demonstrating the resilience and momentum of our customer-obsessed strategy.’ The CEO adds ‘in the last week of March, rides reached the highest weekly levels in our history.’

OTHER LEISURE:

Peloton Q1 numbers yesterday disappointed the market in the US with the company reporting a loss per share of 12c, around double the market estimate of a 6c loss….

• The company reported revenues from the equipment division down by 27% with overall revenue down by 13% and paying subscriber numbers sharply lower. CEO Peter Sturn says the churn was ‘reflecting continued resilience’. He adds ‘during this period of economic uncertainty, we believe Peloton is well-positioned to maintain its leadership within the global fitness and wellness industry.’ The shares fell by around 8% in early trading.

Aquis-listed Newbury Racecourse has reported full year numbers to end-December saying that revenue rose by 16.3% to £22.04 with PBT up to £1.1m from £0.72m in the prior year….

• The group says that race-day attendances rose from 129.8k last year to 133.9k. Chairman Dominic Burke adds that ‘the Company’s commitment to prize money was demonstrated by an 18% increase in 2024, compared with 2023, combined with a 22% increase in our executive contribution.’ He adds ‘this investment into racing has been made despite a very challenging cost inflation environment.  The Company continues to invest in racecourse facilities to ensure that we provide high quality facilities for all of our visitors, event delegates, racegoers and racecourse attendees, as we continually strive to invest for the future benefit of the business.’

FINANCE & MARKETS:

The Bank of England’s MPC yesterday cut UK rates by 0.25% to 4.25%. Whilst the cut was widely expected, the vote was five in favour with two members voting to hold rates and two voting to cut them by a larger 0.5%…

• The Bank reports that ‘underlying UK GDP growth is judged to have slowed since the middle of 2024, and the labour market has continued to loosen.’ It says that ‘uncertainty surrounding global trade policies has intensified since the imposition of tariffs by the United States and the measures taken in response by some of its trading partners.’

• It says that based on its ‘evolving view of the medium-term outlook for inflation, a gradual and careful approach to the further withdrawal of monetary policy restraint remains appropriate.’

• The CBI responds to the cut, saying that ‘heightened uncertainty could keep the MPC from easing off on the brakes too much. Evolving global trade dynamics—and the potential for further restrictions—could affect UK inflation in either direction. And the Committee remain concerned about a decline in domestic supply capacity, which could put further pressure on prices.’

UKH comments on yesterday’s interest rate reduction saying that it ‘will provide some relief for businesses paying back Covid loans.’ It ‘urged the Bank of England to meet market expectations of further rate cuts this year….’

• CEO Kate Nicholls says the ‘cut to interest rates is positive for hospitality businesses. Many venues are still paying back Covid loans and have been suffering under high interest rates, as well as continuing to grapple with the £3.4 billion in additional annual cost that was placed upon them last month.’

• Ms Nicholls adds ‘driving economic growth is rightly the Government’s focus and it’s clear that the markets are anticipating further cuts to interest rates this year. It’s important the Bank of England meets those expectations. This will be absolutely vital for hospitality businesses to fulfil their ability to support our communities, create local jobs and drive socially productive growth.’

The Bank of England’s May Monetary Policy Report suggests that changes in global trade policies will impact the economy.

The NIESR is forecasting inflation to average 3.3 per cent over the year. It says that ‘persistent wage growth stemming from a historically tight labour market and upward pressures from regulated price increases mean that inflation is likely to return to target more gradually over the next three years…’

• The NIESR says ‘we anticipate two more 25 basis point rate cuts in 2025. While an uncertain economic outlook is likely to constrain the Bank of England’s room for manoeuvre, we expect the MPC to look through short run cost pressures and continue cutting rates to support its objective of long run price stability.’

• It adds ‘we believe that the government is not on track to meet its fiscal rules. A weaker economic outlook and lower projected tax receipts are set to erode the limited headroom over the course of the parliament, increasing the likelihood that tax rises will be needed in the upcoming Autumn Budget.’

President Donald Trump is now hinting that tariffs on goods from China may fall. He says ‘you can’t get any higher. It’s at 145, so we know it’s coming down.’

The CBI comments on the UK government’s latest trade deal saying ‘the UK Government should be commended for securing a trade deal with India and now the US. A clear message is being sent to the international community: the UK is a fierce advocate of free and fair trade and a reliable partner with whom to do business.’

Sterling mixed yesterday at $1.3234 and €1.1791, Oil higher at $63.20. UK 10 year gilt yield up 8 basis points to 4.54% despite the rate cut. London down but most markets better yesterday and London set to open around 29 points higher as at 6.30am.

RETAIL WITH NICK BUBB:

• Nick is taking a short break. Back on 19 May.