Greggs sees FY slightly ahead of expectations after strong Christmas

FTSE 250 baker Greggs said on Tuesday that its full-year results are likely to be slightly ahead of previous expectations following particularly strong sales over the Christmas period.

In the year to the end of December, total sales were up 7% while company-managed shop like-for-like sales were 4.2% higher. Sales over Christmas were especially strong, and as a result, fourth-quarter company-managed shop LFL sales grew 6.4%.

Greggs said its new ‘balanced choice’ bakes have proved popular, along with hot food options such as the company’s new burritos.

During the year, it opened 145 new shops and closed 79, growing the estate to 1,764 shops.

The company struck a cautious tone on the outlook, however, saying greater uncertainty in the trading environment will put increased pressure on real income growth.

In addition, Greggs said it continues to expect some industry-wide cost pressures in 2017 and these are likely to have a modest impact on margins in the short term.

Chief executive Roger Whiteside said: "We finished 2016 well, delivering our thirteenth consecutive quarter of like-for-like sales growth, and anticipate that we will report full year results for 2016 slightly ahead of our previous expectations.

"In the year ahead, whilst we will undoubtedly see a number of well-documented industry headwinds, we are confident we will continue to make progress with the implementation of our strategic plan, including significant investment in our capability to supply a growing shop estate."

Shore Capital nudged up its FY2016 expectations on the back of the update, saying it now expects pre-tax profit of £78m versus £77.4m previously.

At 0900 GMT, the shares were up 3.8% to 1,039p.