Investing.com -- Shares in Mitchells & Butlers Plc fell over 5% on Thursday after Britain’s pub and restaurant operator reported like-for-like sales growth slowed to 1.1% in the most recent three weeks, even as first-half adjusted earnings broadly met analyst estimates.

The company, which operates brands including Harvester, Miller & Carter and Toby Carvery, posted adjusted operating profit of £181 million for the 28 weeks ended April 11, unchanged from £181 million a year earlier, against a Morgan Stanley estimate of £182 million and a Visible Alpha consensus of £182 million.

Total revenue rose to £1.49 billion from £1.45 billion in the year-earlier period, marginally below the Morgan Stanley estimate of £1.50 billion and the Visible Alpha consensus of £1.51 billion.

Like-for-like sales grew 3.3% over the half, comprising first-quarter growth of 4.5% that decelerated to 1.8% in the second quarter.

In the 30 weeks to April 25, like-for-like sales grew 3%. The most recent three-week reading of 1.1% reflected "a strong prior year comparative, which benefited from favourable weather alongside some indications of macroeconomic pressures and, more recently, disruption from tube strikes," the company said.

Adjusted earnings per share of 17.4 pence beat the Morgan Stanley estimate of 17.1 pence but fell short of the Visible Alpha consensus of 17.8 pence. Adjusted profit before tax was £139 million against estimates of £138 million and £143 million respectively.

Adjusted EBITDA of £256 million exceeded both the Morgan Stanley estimate of £254 million and the Visible Alpha consensus of £251 million. The adjusted operating margin narrowed 0.3 percentage points to 12.1%.

“The company puts weakness down to unhelpful weather, tube strikes and some broader macro uncertainty, but sounds upbeat on the outlook. We currently model FY26e LfL sales +3.5% which implies an improvement to +3.7% in H2, which looks a tad ambitious,” Morgan Stanley said.

Cost headwinds for the full financial year are anticipated at approximately £120 million before mitigation, representing approximately 5.5% of the cost base, the company said, about £10 million lower than previously guided.

The company said headwinds are expected to be approximately 60% weighted to the first half. For the financial year 2027, cost headwinds before mitigation are expected to normalise at around £95 million, representing approximately 4% of the cost base.

Net debt excluding leases fell to £747 million from £860 million a year earlier. Cash inflow before bond amortisation was £98 million against £131 million in the prior-year period. Capital expenditure rose to £117 million from £92 million.

The company operates 1,712 sites in the UK and Germany, of which 1,638 are directly managed.