Greggs has upped its profit guidance and pledged to continue innovating, a week after the launch of its vegan sausage roll caused a stir.
The bakery chain now expects underlying pre-tax profits for the full 2018 financial year to be at least £88 million, slightly higher than previously guided.
This comes as sales over the 52 weeks to 29 December rose 7.2 per cent, driven by growth in newer categories such as breakfast and vegan-friendly food as well as classic bakes. Fourth-quarter sales were boosted by festive bakes and mince pies.
Chief executive Roger Whiteside said the performance reflected the company’s efforts to target the food-to-go market.
“In the year ahead, we will continue to innovate with products designed to reflect changing consumer tastes, and by opening in new locations that make Greggs even more accessible to customers,” he said.
Last week the announcement that a vegan-friendly sausage roll would be served in Greggs branches drew a flurry of responses online, including comments from Piers Morgan and Ricky Gervais.
John Moore, senior investment manager at Brewin Dolphin Scotland, said: “Last year was volatile for Greggs – it issued a profit warning after the Beast from the East and there were a range of other challenges for the business.
“But this latest set of figures underlines why the company is as popular with investors as it is with shoppers.
“There is real momentum behind Greggs – the share price is up more than 40 per cent since summer 2018. The company has the ability to change and innovate, and the launch of its vegan sausage rolls, regardless of what Piers Morgan might think of them, is the latest example of that.
“The hype surrounding this new product launch shows the reach of the brand and, if this translates into continued sales momentum, then it could be another good first quarter for Greggs in 2019, despite a myriad of economic uncertainties.”