‘Peak Greggs’ Concerns Subside as U.K. Baker Boosts Forecast

(Bloomberg) --

An unexpected boost to guidance pushed Gregg Plc’s shares back into the U.K.’s top 10 mid-cap stocks of the year, alleviating any fears that the stock had peaked as buzz for its vegan sausage roll abated.

Shares rose as much as 17%, the most intraday on record, after the company said it expects full-year adjusted pretax profit to be higher than its previous view. The stock is now among 2019’s 10 biggest gainers in the FTSE 250 Index, with today’s gain helping to pare recent declines amid concerns about normalizing growth and fading buzz about its successful vegan product.

“Greggs is having no problem in pulling in customers,” independent retail analyst Nick Bubb wrote in emailed commentary. “Today’s unscheduled update flags that the business is still on a roll.”

Monday’s statement suggests that Greggs is faring better than other retailers, as the latest data from the British Retail Consortium and Springboard show U.K. footfall for the four-week period to Oct. 26 dropping 3.2% from a year earlier.

The shares -- which are now up 64% this year -- pulled back in July after Peel Hunt analysts questioned whether “peak Greggs” has been reached. Greggs Chief Executive Officer Roger Whiteside refuted this suggestion on a call with journalists.

To contact the reporter on this story: Lisa Pham in London at lpham14@bloomberg.net

To contact the editors responsible for this story: Beth Mellor at bmellor@bloomberg.net, Tom Lavell

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