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Greggs bucks gloomy UK retail trend with profit upgrade

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By Reuters
Greggs bucks gloomy UK retail trend with profit upgrade
FILE PHOTO: Signage and logo are pictured outside a branch of Greggs in Liverpool, Britain, July 30, 2019. REUTERS/Phil Noble   -   Copyright  PHIL NOBLE(Reuters)

LONDON (Reuters) – Baker and takeaway food group Greggs <GRG.L> upgraded its profit guidance for 2019 on Monday, underlining its position as one of the few strong performers in Britain’s troubled retail sector.

Shares in Greggs have increased 48% over the last year, driven by buoyant trading that has been partly fueled by the phenomenal success of its vegan sausage roll, launched earlier in the year.

However, the stock had fallen last month after it reported sales growth in its third quarter, though still robust, had slowed.

The firm, which trades from over 2,000 UK retail outlets, said on Monday total sales grew 12.4% in the six weeks to Nov. 9 – its fourth quarter to date. Like-for-like sales in company-managed shops were up 8.3%.

Greggs said sales growth continues to be driven by increased customer visits and has been stronger than it had expected given the improving comparative sales pattern that it saw in the fourth quarter last year.

“Whilst the comparative sales become stronger still in the balance of the year, the board now anticipates that full year underlying profit before tax (excluding exceptional charges) will be higher than our previous expectations,” it said.

Prior to the update analysts’ average forecast was a 2019 pretax profit of 109.7 million pounds ($140.4 million), according to Refinitiv data, up from 89.8 million pounds in 2018.

Shares in Greggs closed Friday at 1,771 pence, valuing the business at 1.79 billion pounds.

(Reporting by James Davey; editing by Kate Holton)