Britain’s Greggs raises profit outlook after trading recovers

British bakery and fast-food chain Greggs on Monday raised its profit outlook, saying it could be around 2019’s record levels, after a strong recovery in sales following the easing of COVID-19 restrictions.

The group, best known for its sausage rolls, steak bakes and vegan snacks, said like-for-like sales in the eight weeks to May 8 were down 3.9% compared with the same period two years ago, having fallen 23.3% in the 10 weeks to March 13.

It said two-year like-for-like sales were positive since non-essential retail in England and Wales was allowed to reopen on April 12.

Taking the two periods together, like-for-like sales were down 13.5% over the 18 weeks to May 8.

The pandemic has prompted Greggs to speed up innovations aimed at reaching more customers. Home delivery, in partnership with Just Eat (LON:JE) has been rolled out to 800 of its over 2,000 outlets, with sales from this channel representing 8.2% of company-managed shop sales in the most recent eight-week period.

“Given our recent trading performance, the board now believes that profits are likely to be materially higher than its previous expectation, and could be around 2019 levels in the absence of further restrictions,” it said.

Previously Greggs had not expected profit to return to pre-pandemic levels until 2022 at the earliest.

Greggs made a record pretax profit of 108.3 million pounds ($152.2 million) in 2019 before slumping to a 13.7 million pound loss in 2020.

Despite the pandemic, Greggs is still opening new shops. So far this year it has opened a net 23 shops, giving a total of 2,101 shops trading as at May 8.

Shares in Greggs, up 31% so far this year, closed Friday at 2,345 pence, valuing the business at 2.4 billion pounds.

($1 = 0.7115 pounds)