Greggs (LON:GRG)’ sales growth has accelerated through each quarter, in defiance of the summer 2018 heatwave conditions that turned many retailers’ performances on their heads. Greggs has passed the scorch test, thanks to the change strategy that the brand has quietly achieved: a change in its locations, its value menus, its customers and its trading dayparts. This result is significant and should help challenge out-of-date assumptions about Greggs. We retain our 1,360p valuation.
Revenue growth rate accelerates
Total revenue grew 7.3% y-o-y in Q3, an acceleration of growth against H1’s 5.2%. Similarly, managed store like-for-like sales growth was 3.2%, higher than Q2’s 1.8%, which in turn was higher than Q1’s 1.1%. Remarkably, the improvement in all three quarters’ like-for-like growth took place against increasingly strengthening comparative growth in the equivalent three quarters of 2017.
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