Greggs shares surge after chain dishes up profit cheer
Shares in Greggs soared after the bakery chain upped its full-year profit outlook thanks to a rise in sales following strong autumn trading.
The group, which has more than 1,900 shops across the UK, saw like-for-like sales growth strengthen to 4.5% in the eight weeks to November 24.
Shares in the firm surged 12%, having jumped as much as 17% at one stage, after it said it now expects full-year underlying pre-tax profits of at least £86 million.
This compares with £81.8 million in 2017.
Greggs said: “This stronger trading in October and November is particularly encouraging as it builds on good comparative sales in the same period last year.
“Operational costs have been well controlled and, whilst there is still much to play for over the final few weeks of the year, the board now anticipate that full-year underlying profit before tax (excluding exceptional charges) will be at least £86 million.”
The rise in sales growth marks pick up from 3.2% growth seen in the third quarter to September 29 and a steady improvement since the first half, when sales edged 1.5% higher.
The recent better trading means year-to-date like-for-like sales are now 2.5% higher and total sales are 6.6% ahead.
Recent autumn menu additions include a Pumpkin Spice Latte and Chilli Beef Bake.
In contrast to many of its high street rivals, Greggs has been opening shops nationwide over the past year, although it has trimmed its expansion plans.
It opened 93 new stores in the first nine months of its year, including 35 franchised outlets largely at transport locations, while closing 35 shops.
The group plans to open 100 net new stores over the year, having recently pegged back its expectations from a previous target for 130 new shops.