Wetherspoons has stated that its profits may be slightly below market expectations as costs increase across the business.

The pub chain reported that in the 13 weeks to 26 April, like-for-like sales increased by 3.4% year-on-year, while its LFL sales in the year-to-date jumped by 4.3%.

Furthermore, Wetherspoons has opened eight pubs, whilst also closing the same number. It currently operates 794 managed pubs, along with 21 pubs that operate under a franchise agreement.

The chain has also purchased over 3.8 million of its own shares for cancellation at an average price of £6.80 a share, and bought the freehold reversions of four pubs for a total of £12.2m. This takes the total amount spent on freehold reversions to £489m since 2011.

In its outlook, Wetherspoons expects its net debt to be between £740m and £760m at year-end, while its interest costs will be approximately £47m, in line with the previous financial year.

Chairman at Wetherspoons, Tim Martin, said: "Wetherspoon's growth for Q3 was slightly below the year-to-date.

"The company has a strong pipeline of new pubs and planned openings include Manchester airport, Heathrow airport, Paddington station, Charing Cross station and Shaftesbury Ave in central London.

"As many hospitality operators, including Wetherspoon, have reported, there have been substantial increases in costs, which may result in profits slightly below market expectations."

Following the announcement, shares in Wetherspoons jumped by just over 1%.

Investment director at AJ Bell, Russ Mould, stated that while it is continuing to outperform many peers, it will have to operate with "skinny margins" to keep prices low.

He concluded: "It is heavily exposed to increasing costs and specifically the energy price shock created by the war in the Middle East.

"The market seems relieved this only means profit might fall slightly short of expectations and sales growth suggests demand is holding up well for now.

"A legacy of the pandemic is the heavy load of borrowings the company is carrying. While interest costs are expected to remain broadly unchanged year-on-year as debt ticks up, if interest rates move higher that could create another headwind for the business."

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