Shares in Mitchells & Butlers (MAB) seem to be in a downward spiral despite the pubs, bars and restaurants group reporting strong trading during its first quarter which encompassed the festive season.

Mitchells said first-quarter like-for-like sales remained well ahead of the market, however the pubs group highlighted circa £100 million of year-on-year cost headwinds driven primarily by increased wage costs linked to changes in October’s UK Budget.

Over the past year Mitchells, which owns All Bar One, Miller & Carter and O’Neill’s, has blamed a variety of issues including poor weather for a drop off in sales growth.

If the pubs group can move past cost headwinds and the impact of wintry weather, Storm Darrah and snow dragged down sales in the first seven weeks of the year, the outlook may improve through the course of 2025.

Analysts at Shore Capital are expecting a £5 million increase in EBIT (earnings before interest and tax) to £317 million for the year and ‘continued profit growth’ even though the macro outlook remains cloudy.

The company has a track record of market outperformance  and delivering cost efficiencies and its balance sheet is improving but the backcloth is clearly very difficult. 

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