The heatwave failed to dampen our appetite for Greggs, where total sales increased by 7.3%.
Sales were not as high as the same period a year earlier, where they increased by 8.6%, however, due to the “particularly hot weather”, sales patterns were more difficult to predict.
In the year to date, total sales soared by 5.9% year-on-year. Like-for-likes increased by 2.1%.
Despite the difficult trading conditions, which has led to the closure of many retailers, Greggs expects around 100 net openings by the end of the year.
Tuesday’s trading update read:
“We were pleased with our trading performance during a period that included a long spell of hot weather, which made sales patterns more difficult to predict.”
“This, and the resulting mix of sales led to a lower-than-normal trading margin in the first part of the quarter, offset by improved trading as we came into September. Overall our expectations for the full year outturn remain unchanged.”
Shares jumped 5.1% on Tuesday morning.
Emma-Lou Montgomery, from Fidelity Personal Investing, said: “Just 10 years ago if someone had suggested bakery chain Greggs would one day win an award for the ‘Best vegan sandwich’ for its Mexican Bean Wrap at the PETA 2018 Vegan Food Awards you’d have choked on your sausage roll. But today Greggs has shown how businesses have to adapt or die.”
Paul Hickman, an analyst at Edison Investment Research, said: “Gross margin came under some pressure during the hot weather because cold drinks and products such as pasta salads are bought-in, and therefore earn lower margins, and also because there was more wastage on traditional products.”
“However, we anticipate that the strong volumes will have supported the contribution to operating profit, leaving the company on course for full-year pre-tax profit consensus of around £81 million.”
Shares in the group (LON: GRG) are currently trading +7.11% at 1.077,48 (0913GMT).
