Greggs is due to release a fourth quarter trading update on Wednesday. Investors will be watching closely to see whether the outstanding performance experience through the autumn continued through the winter.
In November the high street bakery chain announced that pre-tax profits would be higher than expected, potentially in the region of £110 million to £120 million. The uplift came after stellar sales data.
The six weeks to November saw sales rise 12.4% compared to an 8.5% increase in the same period the previous year.
The share price has jumped over 30% since the profit increase announcement in November, rallying from 1785p to 2376p. A strong set of results on Wednesday could hep lift the stock higher, Greggs is just 3.5% off its all time high reached in July 2019. Meanwhile across the year the stock is up an impressive 80%.
What’s driving the sales?
Sales shot up in the autumn as customers couldn’t get enough of the bakery’s evolving menu. The festive bake was one addition, and the vegan version of the popular steak bake - ready for Veganuary has been another addition this New Year. Investors will be hoping that Greggs comments on the initial performance of the vegan steak bake, added following the blow away successful of the vegan sausage roll last year.
Greggs jumped onto the Vegan bandwagon at its sweet spot. The vegan sausage rolls improved brand awareness no end. The firm is optimistic that the vegan stake bake will have a similar impact as Greggs look to provide more on the go vegan options.
Can the success continue?
As long as Greggs continues to evolve its menu in line with changing consumer demands the runaway success could continue. However, with tough comparable ahead momentum could wane which could in turn weigh on the share price.
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