retail

Greggs lifts full-year profit forecasts

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Greggs, the UK bakery chain, has lifted its profit forecasts for the fourth time this year as more consumers visited its stores.

The company, which has transformed itself from a traditional seller of cakes and buns into a food-on-the-go retailer, said that total sales for the six weeks to November 9 were up 12.4 per cent from the same period last year, the group said in a statement on Monday.

As a result, the company said that underlying profit before tax for 2019 would be ahead of its previous guidance. When Greggs last upgraded its earnings outlook in May, the company’s in-house broker Edison said that it expected profits for the full year to be around £107m and revenues to come in at £1.16bn.

At the beginning of the year Greggs enjoyed a boost from the introduction of its vegan sausage roll, which helped drive revenues above the £1bn mark in March. Its shares are up almost 40 per cent this year.

However, in its last trading update in October, Greggs disappointed investors when it warned of increased costs from the impact of Brexit and said that it expected to open fewer shops this year than previously planned.

The retailer plans to launch more vegan lines in January, while it is also expanding its delivery offering and hot food menu, as well as introducing more barista-style coffee options in a bid to compete with rival Pret.

Pret announced in May that it planned to buy the sandwich chain Eat and turn its stores into vegetarian food-to-go stores to take advantage of the growing appetite for vegetarian and vegan food.

In Monday’s update, Greggs said that total sales so far this year had increased 13.4 per cent, driven by higher numbers of customer visits. Greggs did not provide a new range for underlying pre-tax profits.

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