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Wetherspoon has issued its fourth profit warning this year as it battles weaker sales and rising costs.
The popular pub chain, led by Sir Tim Martin, prides itself on offering customers good value food and drink but has come under pressure from higher labour and energy costs.
Wetherspoon said like-for-like sales rose by 4 per cent in the 12 weeks to 19 July, compared to the same period last year, while year-to-date sales rose 4.2 per cent.
Other pub chains, including Marston's and Fuller's, have hailed the impact of the World Cup football tournament on rising sales, but Wetherspoon's missed analysts' forecasts.
While customers are still coming through the doors, cost pressures are eating away at margins.
Martin said: 'Profits for the year are likely to be below market expectations, with marginally lower sales than anticipated in the final quarter, combined with higher costs in the areas of food, labour, repairs, energy and business rates.'
It represents a hardening of the outlook from the cautious tone struck in May's profit warning, when Martin said a rise in costs 'may result in profits slightly below market expectations' of £73million.
Those forecasts have been slashed, with analysts now anticipating the firm to deliver pre-tax profits of £45.1million, down from last year's £81.4million.
Shares in Wetherspoon fell 8.42 per cent to 690.50p on Wednesday morning.
The outspoken pub boss has previously warned about the impact of higher labour costs on the group's bottom line.
He previously said Wetherspoon was facing £60million in extra costs every year due to hikes in national insurance and minimum wage rates, as well as an extra £7million in energy costs.
Wetherspoon opened eight managed pubs and sold nine during the financial year, leaving it with 793 managed sites. It expanded its franchised estate, opening 15 pubs to bring the total to 23.
The group repurchased 6.4million shares at an average price of £6.52 during the year and bought the freehold reversions of four pubs for £12.2million.
Year-end net debt is expected to come in at £720million, an improvement on the £740million to £760million range previously forecast and broadly in line with last year's level.
Garry White, chief investment commentator at Raymond James, said: 'The update will come as a disappointment to investors, given expectations had been elevated ahead of the trading statement because of the favourable summer conditions.
'While the reporting period only captures the opening days of the World Cup, meaning any meaningful uplift from the tournament is likely to be reflected in first-quarter trading, investors will be hoping this provides some support for a recovery in sales momentum.
'Nevertheless, the latest update is unlikely to be received positively by the market.'
