Greggs' (LON:GRG) Q4 sales update demonstrates a robust performance in what has been a tough retail market. The company’s self-help strategy shows that this is a business firmly in control of its own destiny. Management expects that the industry-wide cost pressures seen in 2017 will continue in 2018 although at lower levels. Greggs expects to deliver full-year results in line with management expectations. A combination of strong trading momentum, easing margin pressures and continued self-help gives us confidence in our 2018 forecasts, which we leave unchanged.
Q4 trading: A strong end to the year
Greggs has traded well in Q4 with managed-store LFL sales up 3.0% against a tough prior year comparison base of 6.4%. In the year to December, total sales grew by 7.4% and LFL sales by 3.7%. The company has confirmed that it expects to meet management expectations for full year profits. Greggs’ strong Q4 showing comes despite difficult market conditions; market data showed a decline in high street footfall in December of 3.5% reflecting a trend for increasing online Christmas shopping.
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