© Reuters.
By Geoffrey Smith
Investing.com — Greggs PLC (LON:) shares rose sharply at the open on Tuesday after the U.K. bakery chain said it’s getting on top of the inflation pressures that have plagued retailers all year.
“We now hold an appropriate level of forward purchasing cover in respect of our fourth quarter requirements for key food and energy commodities,” the company said as it reported a 9.7% rise in like-for-like sales in the third quarter. It repeated its forecast of around 9% cost inflation over the year – something that itself represents a degree of improvement after a string of upward adjustments in recent months.
It added that it also has “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 stock, which had lost around 30% in the last six months as the U.K.’s cost-of-living crisis battered consumer-facing sectors, increased by 6.8% as of 03:30 ET (0730 GMT).
The company was still cautious about the outlook, seeing “considerable uncertainty in the economy as a whole,” but adding that its own trading is in line with expectations – a trend that it trusts will continue through the end of the year.
Store openings throughout the year allowed Greggs to raise overall sales 14.6% from a year earlier in the 13 weeks to October 1. The company said, however, that it would delay some planned capital expenditure to next year, cutting its estimated spending this year by 50 million pounds to £120 million ($136 million).
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