Greggs PLC (LSE:GRG) shares climbed 4.1% to 1,585p on Tuesday morning, after the Tyneside-headquartered bakery chain reported an improvement in sales in recent weeks.
Like-for-like sales came in at 2.5% over the first 19 weeks of the year, an improvement from the 1.6% disclosed after nine weeks, thanks to an acceleration to 3.3% in the last 10 weeks.
This also comes despite a tougher comparative a year ago, analysts at Jefferies noted.
With the FTSE 250 group saying that improved trading has been supported by menu development, such as the new chicken roll launched in April, Jefferies said: "we suspect this has been a key contributor to the improved LFL trend".
Elsewhere, guidance was reiterated on 120 net new stores, cost guidance at 3% and PBT guidance.
The company said it is "monitoring the situation in the Middle East" and sees scope for food inflation in the second half of the year if the conflict continues, but is well-hedged on key requirements, with around five months of food and packaging costs covered and 85% of its 2026 energy and fuel needs fixed at current prices.
It was "a solid update", was Jefferies' overall view, with LFLs improving, strong profit extraction, and guidance reiterated. "That being said, our analysis suggests price is contributing circa 6%, such that volumes remain in negative territory."
Shore Capital felt that "same-store volumes looking like they are stabilising, which is a relief".
Analyst Clive Black said Greggs is "in the midst of quite a material infrastructure investment, which is an enormous capital expense, but at least commissioning is in tow".
He reiterated a 'hold' rating, saying: "If trade can remain sound as the peak capital expenditure is worked through, much stronger cash flow metrics may be ahead, which could make the stock a lot more interesting in due course, but that is for FY27 and thereafter."