Whitbread hails ‘strong’ first quarter trading as sales edge higher

Whitbread PLC on Thursday expressed confidence in its full-year outlook, as it posted improved sales in its first quarter.

The Dunstable, Bedfordshire-based hotel and restaurant operator reported sales of £727 million for the 13 weeks ended May 28, rising 2% from the same period a year prior.

Whitbread noted a positive trading performance in both Premier Inn UK and Premier Inn Germany, but this was offset in part by the expected reduction in UK food and beverage sales owing to its Accelerating Growth Plan.

This plan, explained Whitbread, involves transitioning a number of its branded restaurants to a more efficient, integrated offering.

Back in April, the company announced a new five-year plan, which it said will result in a ‘material step up in margins and returns’ as it reported a drop in annual pretax profit. The company said measures are expected to lead to a reduction of around 3,800 jobs as part of the plan.

Following this, Corvex Management LP in May urged the Premier Inn owner to put itself up for sale as it slammed the 5-year strategic plan.

The New York-based activist hedge fund, which holds an around 7% stake in Whitbread, said the only ‘credible’ path to unlocking value at Whitbread is a sale of the company.

For Premier Inn UK, total accommodation sales rose 3% in its first quarter, with Whitbread noting it continued to outperform the midscale and economy market.

Premier Inn Germany saw accommodation sales improve 13% in local currency, and rose 16% in sterling terms, with this credited to continued estate growth and the benefits of the company’s commercial initiatives.

Looking ahead, Whitbread backed its full-year outlook, as it said strong leisure bookings mean its forward order book is ahead of last year.

Shares in Whitbread were down 0.7% at 2,377.00 pence on Thursday morning in London

‘We delivered a strong and improved performance in the first quarter. In the UK, driven by the strength of our brand and commercial programme, total accommodation sales and RevPAR continued to grow ahead of the wider market. In Germany, demand strengthened through the quarter and with the opening of six new leasehold hotels, we drove double-digit accommodation sales growth and continued to outperform the wider market,’ said Chief Executive Dominic Paul.

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