Mitchells & Butlers reports flat sales as heatwave hits food brands

Mitchells & Butlers PLC on Thursday reported flat sales for the third quarter, as it said the heatwave hurt its food-led businesses.

The Birmingham, England-based restaurant and pub operator said in the third quarter to July 18, like-for-like sales were flat. Drink sales increased 2.6% while food sales fell 2.4%.

For the year-to-date, like-for-like sales are 2.2% higher, as drink sales climb 2.5% and food sales rise 2.0%. Total sales in the year-to-date have increased 1.3%.

Mitchells & Butlers said "challenging weather conditions" moderated its performance in the third quarter against "strong comparatives".

It said performance in the quarter was affected by the timing of Easter, which fell in the third quarter last year. This caused a 0.8 percentage point headwind to like-for-like sales growth.

"Several extended periods of extreme heat also had an adverse impact on trading," Mitchells & Butlers said.

Pubs and other drink-led brands have "generally performed well", with a boost from the football World Cup. However, "exceptional heat" has hurt food-led businesses, particularly Toby Carvery and Miller & Carter.

Mitchells & Butlers said it has accelerated its number of projects this year and has completed 181 conversions and remodels so far. It has also acquired 10 new sites.

Looking ahead, the firm's cost inflation expectations are unchanged at £120 million for financial 2026.

"However, the actions taken across the business, together with the benefits of our Ignite programme and investment strategy, provide confidence in our ability to deliver a full-year outturn for the current year in line with consensus expectations," Mitchells & Butlers added.

Chief Executive Phil Urban said: "Our business has performed with resilience during a quarter characterised by unusual weather patterns. The strength of our diversified portfolio has moderated the impact of external factors and together with the continued success of our investment programme and Ignite initiatives we remain confident in delivering our full-year expectations."

Shares in Mitchells & Butlers were down 4.6% to 260.50 pence on Thursday morning in London.

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