The Restaurant Group shares fall as Wagamama reports slowing growth
Wagamama owner The Restaurant Group suffered a share price drop this morning after the Asian fusion chain reported slowing sales growth in the second quarter.
Like-for-like sales growth was 6.3 per cent in the UK, less than half the 12.9 per cent growth reported in the first quarter of the year.
Read more: The Restaurant Group swings to a loss
Sales growth in the US remained strong at 12.5 per cent in the 22 weeks to 29 September.
Shares in The Restaurant Group, which also owns Frankie & Benny’s and Chiquito, fell as much as eight per cent to 134.3p before lifting slightly to 136.9p.
However, in a note to investors JP Morgan analysts said: “Like-for-likes remain impressive against a difficult market backdrop.”
Turnover increased 11 per cent to £93.5m as the company opened six new Wagamama restaurants and one delivery kitchen during the quarter.
The casual dining chain, which The Restaurant Group bought for £559m last year, also warned that it will continue to face headwinds in 2020.
Chief executive Emma Woods said: “Great businesses are built from dedicated people, a commitment to always be on the side of their customers and a galvanising sense of purpose.
“Wagamama has always followed this model, and I am thrilled to say has delivered another quarter of strong outperformance versus the market with a number of record restaurant sales weeks.
“We look forward to 2020, and whilst we don’t expect to be immune to the various headwinds facing our industry, we will stay true to our positive culture and growth mindset.”