Greggs (LON:GRG): An unscheduled trading upgrade confirms impressive stronger than anticipated sales growth in October and November, on the back of a robust Q3 and tough prior year comparatives. Cautiously factoring in slightly weaker Christmas trading as shoppers increasingly favour buying online, we raise our FY18e PBT by 6.4%. Our valuation increases to 1,516p.
Robust sales growth in October and November
Bucking the wider trend, Greggs has upgraded expectations for FY18 underlying pre-tax profit to be ‘at least £86m’ (Edison: £81.3m), following a stronger than anticipated eight weeks to 24 November. Over the period, leading on from a solid third quarter, total sales increased by 9.0% (Q318: 7.3%) and like-for-like sales in company-managed shops increased by 4.5% (Q318: 3.2%). Over the year to date, total and like-for-like sales have increased by 6.6% and 2.5%, respectively, against tough prior year comparatives, while operating costs have been well controlled.
To read the entire report Please click on the pdf File Below..