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Full-year profit forecast to grow 10%
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HY profit up 14% to 63.7 mln stg; sales rise 16%
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Shares down 4%
LONDON, Aug 1 (Reuters) - Greggs stuck to forecasts for profit to rise 10% this year, as British consumers continued to seek its value baked goods, salads and coffee, and as its evening opening hours and loyalty app help drive sales higher.
As high inflation in Britain squeezes disposable incomes, the bakery chain said it was gaining market share with its focus on affordable food and the launch of new ranges, including its sweet Chilli Chicken Noodle Salad and its Mexican chicken-free bake.
Underlying sales rose 16% in the 26 weeks ended July 1, boosting underlying pretax profit excluding exceptional items by 14% to 63.7 million pounds ($81.7 million), which Greggs chief executive said reflected its cheaper prices versus competitors.
"When they (customers) are out and about needing food on the go, we would hope that they would come and shop with us more often because that's a choice that can save them money," CEO Roisin Currie said on Tuesday.
Rising costs have hit Greggs, but it expects inflation to moderate during the second half to 7% from 11% in the first, putting the annual rate at 9%.
Greggs trades from 2,400 stores and will open 150 new shops over the course of this year, including outlets in big supermarkets like Tesco, as well as at airports.
Goodbody analysts said that while the update showed Greggs continued strong performance, "We see little in today’s update to push the stock on from current levels."
Shares in Greggs sank 4% to 2,637 pence in early trading. Over the last 12 months, the stock has gained 27%, far outperforming Britain's midcap index which is down 5%.
Analysts expect Greggs to report pretax profit of about 163 million pounds ($205.7 million) this year, according to Refinitiv, up 10% on 2022.
The company lifted its interim dividend by 7% to 16 pence par share.
