LONDON (Reuters) – British baker Greggs <GRG.L> reported a pick up in underlying sales growth in the third quarter of its financial year, as soft drinks and new focaccia-style pizzas proved popular during a sizzlingly hot summer.
The company, which sells sandwiches, sausage rolls and pastries from more than 1,900 outlets, said on Tuesday like-for-like sales rose 3.2 percent in the quarter, an improvement on its first-half performance.
It added the mix of sales in the hot weather led to a lower-than-normal trading margin in the first part of the quarter, offset by improved trading in September.
Investec analysts, who rate Greggs a “buy”, said the pick up in like-for-like sales – from 1.5 percent in its first half – was a decent performance in light of generally subdued shopping streets and tougher comparatives over the period.
Shares in the company, which warned on profit in May, were up 7 percent at 1,076 pence in morning deals.
Greggs said expectations for the full-year were unchanged.
Prior to Tuesday’s update, analysts were forecasting a 2018 pretax profit before one-off items of 81.5 million pounds , according to Refinitiv data, versus 81.8 million pounds in 2017.
(Reporting by Paul Sandle; Editing by Kate Holton and Mark Potter)