Greggs beats expectations with meaty Christmas treat

13th Jan 2015 08:05

A very strong post-Christmas update from meaty treats retailer Greggs led management to boast that full year results will beat current expectations.Christmas like-for-like (LFL) sales rose 8.2% in the five weeks to 3 January, versus a 3.1% rise in the same period a year ago, which has lifted the fourth quarter LFL sales to 6.0% and full year LFLs to 4.5%, higher than most analyst forecasts.Total sales grew by 5.5%, including the impact of the additional trading week, and management concceded that trading conditions and the weather had been helpful."Since our last update on 15 December we have experienced a very strong level of trade through the Christmas and New Year period," said chief Executive Roger Whiteside."Customers have clearly responded to the improvements in our product offer and service, designed to meet the needs of the food-on-the-go consumer, during this busy period."Greggs said its 'food-on-the-go' focused product range "struck a chord" with customers over the Christmas period with growth in sales of sandwiches, sausage rolls and coffee, while sales of its healthier range continued to grow and new products such as fresh soups and a steak and cheese roll were well received.The food retailer, which completed 213 shop refurbishments in the year, had 1,650 shops trading at the period end after opened 50 new shops and closing 71.On outlook, Greggs said conditions for the first half "look encouraging" thanks to lower expected cost inflation and the improved outlook for disposable incomes."This has been a year in which we have made good progress with our strategic plans and seen a welcome improvement in financial performance," said Whiteside. "We remain clear on our priorities and are confident that we can make further progress in the year ahead."Analysts were impressed. N+1 Singer said: "The consistent outperformance is encouraging and we see scope for positive operational leverage to be sustained over FY15. We push through 3-6% EPS upgrades and advocate fair value towards 830p."