By Scott Wright
SHARES in the hospitality company that owns the Fridays chain plunged 14 per cent after it warned sales may fall during the rest of the year amid the cost-of-living crisis.
Hostmore said like-for-like sales could drop by up to 8% as it declared the “challenging consumer environment” had led to the company “taking a more prudent view on trading for the remainder of the year”.
The warning came as Hostmore, which floated on the stock market in November, reported that like-for-like revenue was 6% lower for the 20 weeks ended May 22 compared with the same period in 2019. It highlighted its belief that consumer confidence had weakened “significantly since Russia’s invasion of Ukraine… which is contributing to the current cost-of-living crisis”.
READ MORE: Hospitality giant Fridays joins signing-on spree as bar group expands
It added that management actions, including pricing adjustments and hedging of utilities, had limited the impact of lower volumes on margins.
The Hostmore portfolio totalled 89 restaurants in the UK and Jersey as of May 26. The company is beginning to roll-out 63rd + 1st, a New York-inspired cocktail bar concept, with an outlet in Edinburgh to follow the inaugural opening in Glasgow soon.
Hostmore chief executive Robert Cook said: “We are not where we expected to be, however, I am able to report a financial performance which, regardless of the arduous challenge and extreme economic headwinds being encountered presently, allows us to confidently continue with our development strategy.
“Our ambition remains that of almost doubling the size of our existing portfolio brands over the medium term as economic conditions improve. Our relationship with landlords, coupled with a prudently managed balance sheet, provides the basis for confidence in the success of our strategy over the longer term."
The period saw the company open its inaugural “fast casual” Fridays and Go outlet in Dundee and a new Fridays restaurant in Chelmsford. Shares closed down 6.8p at 42.9p.
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