DGE, vertical drinking, US quarterlies: Molson, RBI, Airbnb, Meta & other:

PREMIUM EMAIL – PLEASE DO NOT FORWARD:

A DAY IN THE LIFE:

Well, we’re up in the land of the chicken parmo at the moment which, for those unfamiliar with those heart-attacks on a plate consists of what looks like a pizza folded over with whatever it is the parmo features stuck on the inside.

And eating one, it has to be said, can be something of a challenge.

Because a small one is around 1,000 calories and, for the gut-busters, you can be looking at up to 4,000 calories which, for a single meal, is a fair bit.

Anyway, we’ve got the weather, we’re doing our bit to keep the pubs’ tills ringing and, with that and with the sheep gently cropping the grass outside this study window, just time to wish everyone a pleasant weekend and let’s move on to the news:

PUBS & RESTAURANTS:

Vertical Drinking:

Standing at the bar, standing around, basically anything other than sitting when drinking is under threat after Westminster Council, which governs areas including Soho and the West End, proposed that standing while drinking and ordering at the bar be banned…

• As might be expected, this has led to quite an outcry. Sadiq Khan, the mayor of London, is amongst a number of figures to criticise the suggestion saying that the ‘restrictive and anti-growth policies’ would damage the capital. He said that he hoped to be able to use new powers to be granted to him by government to stop councils from overreaching in this way.

• The Guardian notes that the policy proposes that pubs should ‘discourage excessive drunkenness and encourage the provision of more seating in premises that serve alcohol for people to sit and enjoy a drink and order food by table service in place of open bar space that caters for high volume vertical drinking.’ The first bit of that makes sense but, in areas such as Soho and the West End, finding the additional space necessary to seat all drinkers would be something of a problem.

• Westminster recommends that sales of alcohol and food should be ‘by waiter or waitress service only’. The Guardian quotes ‘top licensing lawyer Philip Kolvin KC’ as saying that ‘vertical drinking is also social drinking, allowing people to mix and socialise as they wish, rather than being confined to their predetermined groups. So this is asking the traditional pub not to behave as a traditional pub and to ask people to stay with the group they came with. One could characterise this as being contrary to the ethos of pubs as places which promote community cohesion.’

• Yes, all of the above and, as far as boy-meets-girl is concerned, having to sit in a pre-determined space with people presumably known to you already, won’t do much to encourage social interaction.

• A spokesperson for Sadiq Khan says ‘this is more evidence that restrictive and anti-growth policies aren’t working. At a time when venues need our support more than ever, the rules on licensing are stacked against them. That’s why the new powers the mayor is getting from government are so important, as they mean the mayor will be able to call in licensing decisions and have a say in local policies to protect London’s vital nightlife and hospitality industries.’

• And entrepreneur Sacha Lord says ‘Westminster council are the most anti-hospitality council in the UK. Their draft licensing policy is out today and is recommending banning standing in pubs, and they don’t want people ordering at the bar. It’s like dragging us back to Covid times.’

COMPANY NEWS:

Diageo shares yesterday rose by 91p or 5.6% on the back of the company’s 11am full year results announcement. The company reported a 3% drop in revenue to $19.643bn with operating profit some 27.2% lower at $3.156bn. Net profit was 22.9% lower at $1.958bn….

• DGE reports that growth in Europe, LAC and Africa was ‘offset by weakness in North America and Asia Pacific.’ It says that organic net sales declined 2.0%. Volume was down 0.4% and the group reports that it suffered from an unfavourable price / mix that cost it 1.6% in reported sales.

• Reported ‘operating profit declined 27.2%, with organic operating profit growth offset mostly by exceptional restructuring costs and impairment charges.’ The group adds that ‘reported operating profit margin declined 535bps.’ EPS pre-exceptional charges was 165.3 cents, up 0.7%.

• DGE reports that ‘net debt as at 30 June 2026 was $20.5 billion, with net debt to adjusted EBITDA of 3.1x.’ The group adds that ‘the sale of East Africa Breweries PLC remains on track to complete in calendar H2 2026’ and ‘the disposal of Royal Challengers Bengaluru cricket team by United Spirits Limited is progressing as planned.’

• The recommended full year dividend is ‘50 cents per share, in line with the new dividend policy announced on 25 February 2026.’

• CEO Sir Dave Lewis says ‘we are pleased with our progress in LAC, Europe and Africa. We are focused on recovering our competitiveness in NAM and we are working through the consequences of Government policy in Chinese white spirits.’ Sir Dave adds that priorities outlined earlier in the year ‘are serving us well’ and he says that ‘the revised operating framework is being rolled out across Diageo and the changes are significant.’

• He says ‘in 2026 this change incurs a cost of $0.8 billion (c.70% of the total cost of the two year programme) with savings realised over 2 years starting in fiscal 27. These savings will allow us to invest in the turnaround without needing to reduce operating profit.’

• Capital Markets Day.

• Diageo hosted a CMD yesterday at which it updated on its near term trading outlook. The company anticipates approximately $1 billion in savings over three years from operating framework redesign ($850 million) and supply chain initiatives ($150 million), with total restructuring costs of around $1.2 billion.’

• It says that for fiscal 2027, it expects broadly flat organic net sales growth, with North America down mid-single-digit, and low-to mid-single-digit organic operating profit growth, alongside $2 billion in free cash flow after $850 million in exceptional costs. Medium-term guidance through fiscal 2029 includes low-single-digit organic net sales growth, mid-single-digit organic operating profit growth, and cumulative free cash flow of approximately $8 billion.

• CEO Sir Dave Lewis reports that the ‘new strategy, executing with a new, more agile, competitive and cost-effective operating model, gives us confidence that we can return Diageo to a business consistently creating value for shareholders.’

• He says ‘we remain a business with a very strong premiumisation agenda, but by activating our wider portfolio, we will be able to serve more consumers, across a variety of occasions. There is hard work ahead, particularly in North America, where improving performance is a clear priority, but we are confident we can deliver without taking a step back in operating profit.’ The CEO concludes that ‘the team and I look forward to sharing more this afternoon and to the work ahead.’ The market generally welcomed yesterday’s update and, as mentioned above, the shares rose by c5.6%.

Molson Coors yesterday reported Q2 numbers saying that ‘net sales decreased 3.3% reported and 3.6% in constant currency.’ It adds that ‘U.S. GAAP income before income taxes decreased 49.0% to $283.1 million’ and ‘underlying (Non-GAAP) income before income taxes decreased 27.8% in constant currency to $383.2 million….’

• CEO Rahul Goyal says ‘we made progress on key aspects of the Horizon 2030 strategy in the second quarter as we navigated heightened global macroeconomic headwinds that affected both consumer behaviour and key input costs in our business.’

• He says that ‘we’re encouraged by Fever-Tree’s continued momentum after more than a year of partnership, and Monaco Cocktails delivered strong performance in its first quarter as part of Molson Coors.’ He concludes ‘our approach for the balance of the year includes prudent investments designed to drive scale and efficiency across our global portfolio while executing against our cost savings plan to mitigate the impacts of persistent macroeconomic volatility.’

• And Tracey Joubert, CFO, says the Q2 ‘financial results largely matched our expectations as we managed through both expected and unanticipated headwinds that weighed on our top and bottom lines. Further progress on our cost savings initiatives partially offset ongoing commodity cost inflation and the impact of lower financial volumes.’

• She adds ‘we are reaffirming our full-year guidance. In the second quarter, we deployed capital toward value-added M&A in support of our Horizon 2030 strategy, enhanced financial flexibility through a series of debt refinancing transactions, and returned capital to shareholders through both dividends and share buybacks. These actions reflect our disciplined approach to balancing our capital allocation priorities.’

Restaurant Group-owned Wagamama and Charcoal Concepts have announced a joint venture to roll out Wagamama units across India. The JV is targeting some 100 outlets across the sub-continent. The first Wagamama restaurant to open in India began trading in Churchgate, Mumbai, around a year ago….

• Restaurant Group CEO Andy Hornby says ‘we’re delighted to officially announce the joint venture with our partners K Hospitality, after months of hard work and collaboration between our two companies.’ He says ‘India is an important target market for us as we grow internationally and gives us more opportunity to introduce more guests to our world-famous flavours, vibrant atmosphere and distinctive dining experience that makes us so special.’

Texas Roadhouse has reported Q2 numbers saying that revenue rose by 11.1% to $1.680bn in the quarter. The company reports total income from operations down 2.4% at $142.8m and diluted EPS down 0.7% at 165c…

• The company reports that LFL sales were up by 6.2% in the quarter. Restaurant margin, as a percentage of restaurant and other sales, decreased 66 basis points to 16.4% as commodity inflation of 7.0% and wage and other labor inflation of 3.9% were partially offset by higher sales.

• The company CEO, Jerry Morgan, reports ‘we are excited about the momentum in our business this quarter as continued strong traffic trends drove record average weekly sales.’ He adds ‘looking ahead, we continue to expect meaningful growth opportunities across all three of our brands. With a strong development pipeline, healthy balance sheet, and our disciplined capital allocation approach, we remain focused on expanding our footprint, investing in our people, and executing Legendary Food and Legendary Service that sets us apart. We believe this focus positions us well to continue creating long-term value for our shareholders.’ Re current trading, the company reports that LFL sales for the first 5 weeks of Q3 were up by 6.2%. It says it expects commodity inflation of approximately 5%.

Property agent Drake & Co has announced the off-market acquisition of two pubs in Sheffield for Punch Pubs & Co. The British Oak ‘is a thriving community pub at the heart of Mosborough’ and The Old Grindstone ‘is one of Sheffield’s best-known pubs, serving both the local community and the city’s large student population.’

Mammoth coffee company Luckin Coffee has released unaudited financial results for Q2 2026 showing that the company increased revenues by 28.5% to RMB 15.86 billion (US$2.33 billion) in the quarter. The rise was driven by store expansion as LFL sales slid by 5.3%….

• Co-Founder and CEO of Luckin Coffee Dr Jinyi Guo says ‘our second quarter performance reflects the strength of our high-quality, scaled growth strategy and the resilience of our business model. We continue to translate growing consumer demand into market share gains, with our store network surpassing 36,000 locations and cumulative transacting customers approaching 500 million.’

• He says ‘as China’s coffee market continues to evolve, we remain confident in our ability to capture the significant growth opportunities ahead while creating long-term value for our shareholders.’

Krispy Kreme has reported Q2 numbers saying that revenue fell by 12.8% as a result of the planned move of a number of stores from managed to franchised units. Losses were reduced to $20.3 million from $435.3 million in Q2 last year. Adjusted EBITDA was up 43% to $28.8 million. The company added that capital expenditures have decreased by 70% in the first half of the year….’

• CEO Josh Charlesworth says ‘the second quarter highlighted continued significant progress on our turnaround to strengthen the balance sheet, reduce leverage, and drive sustainable, profitable growth.’ He reassured that the company is maintaining its previously issued guidance of systemwide sales growth of 2% to 4%.

Restaurant Brands International, which includes the Burger King and Tim Horton’s brands, has reported Q2 numbers saying that system-wide sales grow 6.4% year-over-year, including 10.7% in International. It says that LFL sales rose by 3.8% with an 8.5% rise at Burger King in the US and a 5.5% rise internationally. The company reports that it remains on track to grow organic adjusted operating income by 8% this calendar year…

• CEO Josh Kobza says ‘we built on our strong start to 2026 with another quarter of over 3% global comparable sales and double-digit earnings growth, led by Burger King’s standout performance and continued strength at International.’

• The CEO adds that ‘these results show the benefits of our diversified portfolio and that the strategy we outlined at Investor Day is working. Burger King’s performance is a great example of what’s possible when you invest in the fundamentals and execute well – an approach we’re applying across all of our brands.’

Papa John’s in the US has reported Q2 numbers saying that ‘global system-wide restaurant sales were $1.20 billion, a 4.8% decrease compared with the prior year second quarter.’ It says ‘North America comparable sales decreased 8.3% from a year ago…’

• Company-owned restaurants were down 8.9% and North America franchised restaurants were down 8.2%; International comparable sales increased 1.5% compared with the prior year second quarter. Net income was $9 million compared with $10 million in the prior year second quarter. EPS was $0.24 compared with $0.28 in the prior year second quarter. However, ‘adjusted diluted earnings per common share was $0.46 compared with $0.41 last year.’

• Focusing first on the good bits, CEO Todd Penegor says Q2 ‘results reflected continued momentum in our International business, where we delivered our seventh consecutive quarter of positive comparable sales, and ongoing headwinds in North America driven by the softer consumer environment, lower order volumes, and a highly promotional QSR marketplace.’

• The CEO says ‘our transformation is taking longer than anticipated’ but adds that the company is ‘seeing encouraging progress, including a growing and highly engaged Papa Rewards membership, supply chain savings, and AI-driven improvements to the customer ordering experience.’ Mr Penegor concludes ‘as we look ahead, we are confident that we have the right operating and capital allocation strategy in place to improve performance and create value for our shareholders, customers and franchisees.’

Coffee chain Dutch Bros has reported Q2 revenues of US$550.9 million, up 32.5% on the same quarter last year. LFL sales were up by 1.7%….

• CEO Christine Barone says Q2 2026 is the 13th consecutive quarter of positive same shop sales growth. She reports that ‘our second quarter performance reflects the strength of the Dutch Bros brand, powered by our differentiated people-led culture and our compelling value proposition that continues to resonate with customers.’

HOLIDAYS & LEISURE TRAVEL:

The FT, commenting on UK hotel profits, reports that costs are holding back profits and that the ‘UK’s ‘staycation’ summer fails to lift hotel profits as costs climb.’ It says that ‘hoteliers have warned that a last-minute rush by UK holidaymakers to swap trips abroad for “staycations” is not translating into profits as the hospitality sector’s costs continue to climb….’

• The FT adds that REVPAR ‘was up 4.6 per cent in June, the fastest year-on-year growth since last September, according to figures from analytics company CoStar.’ It adds that ‘growth was driven largely by coastal and rural markets, buoyed by domestic staycations, as well as event-driven tourism in cities such as Glasgow and Cardiff.’

Airbnb yesterday reported Q2 numbers with its shares rising by around 10% on the news that the company had turned in revenue up 17% year over year in the quarter to $3.6 billion with the value of gross bookings up 16% to $27.2 billion. EPS came in at $1.37, well ahead of estimates of $1.26. Net income was $816 million with adjusted EBITDA up 21% year over year to $1.3 billion….

• The company pointed to accelerated growth in Q2 in key markets including the US, France, the UK and Australia. In Q3, the company now expects revenue of $4.69 billion to $4.77 billion, up some 15% to 17%. Gross bookings should be up in the mid-teens and EBITDA margin should be at least 35.5% as a result of stronger revenue growth and operating leverage.

EasyJet has agreed to the £5.7bn takeover proposed last month from US private equity firm Apollo Global Management. The takeover should complete by March 2027….

• Apollo says ‘EasyJet is a leader in European aviation, having built a differentiated market position through its compelling customer proposition, expansive network and strong brand. Apollo strongly supports easyJet’s commitment to enhancing the connectivity of travellers throughout Europe and the UK and the important role that its employees play in serving customers.’

CoStar reports that the US hotel market performed positively in the post-World Cup week to 1 August. It says that occupancy was up by 2.6% and ADR rose by 4.5%. REVPAR was some 7.3% higher.

The GBTA reports that it sees 2026 business travel spending rising by 7.2% to $1.71 trillion this year, slightly ahead of its earlier projections of a total of $1.69 trillion.

American Express Global Business Travel has reported Q2 numbers saying that revenue rose by some 38% when the acquisition of CWT (completed last September) is taking into account.

Transport for London has granted Wayve minicab licences for Uber to operate driverless taxis from ‘later this summer’.

OTHER LEISURE:

UK culture secretary, Lisa Nandy, has said that the government will not block Paramount’s proposed acquisition of Warner Bros Discovery after receiving concessions.

Meta, owner of Facebook, Instagram and WhatsApp, has been ordered by a US judge in New Mexico to pay a fine of another $567m for failing to warn the public about dangers its platforms posed to children. This is in addition to $375m in fines already levied. Meta says ‘we disagree with the ruling and will appeal….’

• The company says ‘we work hard to keep people safe on our platforms and have been transparent about the challenges of identifying and removing bad actors and harmful content. We remain confident in our record of protecting teens online and will continue to defend ourselves against claims that misrepresent the facts.’

Accell, a Dutch company that owns Nottingham bike manufacturer Raleigh, is reported to have begun insolvency proceedings.

Peloton has reported Q4 numbers saying that revenue in the quarter was $608 million, up marginally on estimates. Full Year revenue was $2.446 billion. The group reports GAAP Net Income was $62 million in Q4 and $63 million for Full Year FY26. Adjusted EBITDA was $142 million in Q4 and $468 million in Full Year FY26….

• CEO Peter Stern reports that ‘fiscal 2026 was a defining milestone as Peloton delivered its first full year of net profitability driven by our improved revenue trajectory and substantial improvements in our cost structure.’

• He says ‘while multi-year transformations take time, our financial discipline has fundamentally reshaped our business and grants us greater flexibility to invest in our core strengths of premium hardware, intelligent software, and human connection. We start the year with strong momentum across every part of our business as we remain focused on our evolution into a connected wellness platform.’

Current FIFA head Gianni Infantino has apologised for what he calls ‘errors’ he made regarding plans to sell off a stake in the World Cup.

FINANCE & MARKETS:

S&P comments on the UK construction industry saying that ‘output levels fell again in the UK construction sector, but at the slowest pace since March.’ It says that its PMI measure for July was 44.7 compared with 38.4 in June…

• Tim Moore at S&P says ‘July data suggests that the performance of UK construction sector has started to stabilise after a sharp downturn throughout the second quarter of 2026. Business activity levels continued to decline in all three main categories, but in each case the rate of contraction was much slower than in June.’

• He says there has been a ‘revival in new tender opportunities in some cases, despite subdued underlying market conditions. This contributed to more upbeat business activity expectations for the year ahead, with confidence levels the highest since February.’

President Donald Trump has said that he will impose a 15% tariff on imports of products made from polysilicon, a material used in semiconductors and solar panels.

Sterling mixed at €1.1673 and $1.3452. Oil up around $4 at $83.73. UK 10 year gilt yield up 7 basis points at 4.96%. World markets mixed but mostly lower yesterday & London set to open down around 15 points as at 6.30am.

RETAIL WITH NICK BUBB:

Today’s/Yesterday’s News: The only news out so far today, apart from all the share buyback updates etc, is that JD Sports has moved quickly to replace Andy Higginson with a heavyweight new Chairman, announcing this morning that Peter Agnefjäll has been appointed to the role, with effect from 1st September 2026. Peter is ‘an internationally recognised retail leader with extensive experience as a Chair and non-executive director’. He built his career over almost two decades at IKEA Group, rising to President and CEO between 2013 and 2017, ‘overseeing a period of significant growth, market expansion and digital transformation’. He gushes in the statement that “I am excited to be joining the Group and look forward to working with the Board and leadership team to leverage JD’s strengths, deepening its roots in international markets and affirming its position in a rapidly evolving retail
landscape”. At the Marks Electrical AGM yesterday, all the resolutions were passed unanimously, with Frasers Group swinging their c21% share stake behind the management.

Today’s Press: In terms of the front-page News headlines, according to the press summary email from the Guardian, the Guardian itself leads with “Cambridge ‘unleashed grotesque racism’ with Arday appointment”. The Times writes “Fraud alert over loans to foreign students”, the Telegraph has “Tories to end social housing for foreigners”, and the Daily Mail says “Foreign nationals face social housing ban under Tories”. Elsewhere, the FT splashes “EasyJet accepts £5.7bn Apollo offer in latest foreign swoop”, while the i Paper says “Every river and lake in England polluted with toxic chemicals”.

News Flow Next Week: Apart from the BRC-KPMG Retail Sales figures for July on Tuesday morning, there’s not a lot on the Retail calendar for next week, although the Heathrow passenger traffic figures for July are also out on Tuesday morning and the Revolution Beauty AGM is on Thursday.