Greggs has upped profit expectations for the year as customers responded to the baker’s new coffee blend and healthier sandwich range.
In a trading update for the 24 weeks to 13 December 2014, the chain said that like-for-like sales increased by 5.2%. It pushed up like-for-like year-to-date revenues by 4.2%, compared with a 1.1% decline for the same period in 2013, and total sales growth to 3.6%.
The performance is ahead of Greggs’ expectations and is against tough comparators for the fourth quarter of 2013.
It put the continued strong performance down to the ongoing investment in its estate of almost 1,700 shops and the new range of low calorie sandwiches and coffee.
Favourable weather was also a contributing factor when compared with the big freeze of 2013.
The news sent Greggs’ share pricing soaring in the early trading, up more than 5% to 690.1p.
Chief executive Roger Whiteside said: “The strong performance that we reported in our September IMS has continued. Trading conditions have remained helpful but there is no doubt that customers are also responding to improvements in our product and service offer and to the investment we are making in the shop environment.
“Whilst there is still much to play for over the final few weeks of the year we currently anticipate that full-year profits will be ahead of analysts’ expectations. We expect to make a further update on trading over the Christmas period in early January.”
The City had forecast the bakery food-on-the-go retailer would report profits of £54m in its preliminary results.
Shore Capital’s Clive Black said this morning: ”The stars are reasonably aligned for Greggs in 2014, in our view. Management makes mention of less disruptive weather conditions for its product categories on the high street, which has been beneficial for trading. However, we believe that credit is also due for Roger Whiteside and his team for the simple but effective improvements that have been brought to the business in product, packaging, merchandising and stores; including seating over the last year or so.”