Shares of Newcastle-based Greggs rose about 10% on Tuesday after it published a third-quarter trading update for the 13 weeks to October 1, 2022, showing total sales up 14.6% and like-for-like sales in company-managed shops rising by 9.7% compared with the same period in 2021.
“As expected, year-on-year growth moderated in August given the particularly strong ‘staycation’ effect seen in 2021, however, momentum returned in September,” said Greggs.
“We closed our shops on 19 September for the funeral of Her Majesty The Queen and this impacted reported LFL sales growth for the third quarter by around one percentage point.
“Our autumn menu is now available, featuring favourites such as the pumpkin spice latte and our chicken & stuffing baguette.
“Our hot sandwich meal deal, which includes southern-fried potato wedges and any hot or cold drink, is now available in over 1,000 shops.
“Our great-value pizza deal continues to be popular all day, particularly in the growing evening daypart.
“The broadening of our vegan-friendly food options has also been well received, and latest additions to the menu include our ‘vegan bean & cheeze toastie’ and the ‘vegan southern fried chicken-free baguette’ …
“Supported by our strong balance sheet, we continue to work on options for development of further capacity to support our significant growth ambitions.
“Some of the planned 2022 costs associated with this work are now likely to move into 2023 and, as such, we now expect capital expenditure in 2022 to be around £120 million (previously expected to be £170 million) with the difference being deferred to 2023.”
In its outlook, Greggs said: “The outlook for cost inflation for the year remains consistent with our previous guidance of c.9% overall like-for-like cost inflation in 2022 and we now hold an appropriate level of forward purchasing cover in respect of our fourth quarter requirements for key food and energy commodities.
“We also hold significant energy cover for the first quarter of 2023, with average costs expected to be below the level of the recently-announced price cap.
“Greggs continues to trade well in an environment where cost pressures are significant and our outstanding value-for-money positioning is ever-more important to consumers.
“There remains considerable uncertainty in the economy as a whole but we continue to trade in line with our plan and currently expect the full year outcome to be in line with our previous expectations.”