The share price for high-street baker Greggs jumped this morning, following an announcement that the firm had increased its full-year expectations.
According to the company, like for like sales climbed 4.9 per cent for the 13 weeks to October 3rd, while total sales were up five per cent.
In addition, year-to-date show sales were up 5.6 per cent, indicating increased momentum at the chain – during the same period last year, sales were up 3.9 per cent.
This morning in London, shares opened at 1,118 pence – up from the previous close of 1,076 pence. They continued to rise throughout the day and at 15:35 were up to 1,162 pence.
Recent shop improvements
Some of the Greggs success can be attributed to the firm's recent work to enhance the appearance of shops – as well as improve the food offering.
For example, the company launched its "Balanced Choice" range, which helped to draw in customers who are concerned about making healthy food choices.
So far this year, Greggs has completed 158 shop refurbishments – and the company says it expects to have 200 completed by the end of the year. In addition, 20 bakery cafes have been converted to "food on the go" formats, which has improved capital return.
The sales rise has also come at a time when the firm has managed to control costs.
In a statement, the bakery said that market conditions remain favourable, with low cost pressures and a stronger consumer environment.
"We expect this to continue through to the end of the year, after which increases to wage rates will drive greater inflationary pressure," the company said, noting that the standard rate for hourly paid shop staff is already above the National Minimum Wage.
"Our sales performance is slightly ahead of our previous plan and, whilst comparatives will stiffen further in the fourth quarter, sales will benefit from additional shop openings. As a result we expect to deliver good growth for the year, slightly ahead of our previous expectations, and further progress against our strategic plan."
StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.