Shares in British pub operator Marston's plummeted over 12% following the announcement of flat like-for-like sales growth in its first quarter. This performance lags behind competitors, despite the company maintaining its full-year profit outlook. The subdued results come after a period of gains, with the stock previously up 16.5% year-to-date.

The flat sales figures are a disappointment for investors, especially given the backdrop of a recovering hospitality sector. The company's growth was concentrated in the holiday period. Management still anticipates profits to align with market expectations, with analysts projecting a pre-tax profit of £83 million for fiscal 2026.

Marston’s plans to expand, with over 50 new pub launches planned this fiscal year. Capital expenditure is earmarked at 7-8% of total sales to support the expansion program. The pub operator also reported no material refinancing requirements for at least a decade and maintained its target for annual recurring free cash flow.

Looking ahead, investors will be watching to see if Marston's can deliver on its margin expansion targets, supported by cost control and efficiency initiatives. The stock currently trades below its pre-COVID average. The company's ability to navigate the current economic climate is also a key factor.