Greggs PLC (LON:GRG) said annual underlying profit will be “slightly” higher than expectations, even after a special £7mln payout to all employees as a thank-you.
Management said in a release they were looking to reward all staff "who have worked so hard to deliver this success", yet some analysts noted the upgrade would have been bigger without the bonus.
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The FTSE 250-listed baker said it will continue to expand its product range “to suit a broad variety of dietary choices” in 2020 as it attributed an “exceptional” year to the pull of its ever-widening vegan range.
The revised guidance came after a continued strong performance in the fourth quarter, with like-for-like (LFL) sales up 8.7%, bringing total sales growth for the year to 28 December to 13.5% with LFL sales up 9.2%.
Greggs said it plans to open 100 more stores this year after finishing the last with a 2,050-strong estate, following 138 new openings and 41 closures.
As well as additions to the product range, management mentioned plans to extend trials for longer trading hours and making delivery more widely available, while costs are expected to increase as the minimum wage gets a boost and the price of pork continues to rise.
“Looking to the year ahead, we face strong sales comparatives and cost inflation headwinds present a challenge,” said chief executive Roger Whiteside in a release.
“However, with strong momentum in the business we see further growth opportunities across a number of channels as we invest in new ways to make Greggs more accessible and convenient for customers.”
Analysts at Peel Hunt said: "Greggs is doing extremely well but the valuation is very high. We accept that this is another good update but would sell into strength."
Shares lost 3% to 2,332.09p on Wednesday morning.
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