LONDON (Reuters) - Underlying sales growth at British baker Greggs (L:GRG) slowed a touch in its latest trading period, hurt by tough trading conditions in March, it said on Monday.
The Newcastle, northern England, based firm sells sandwiches, sausage rolls and pastries from 1,720 retail outlets in the UK, more than burger chain McDonald's (N:MCD), and sees scope for substantially more than 2,000.
It said sales at company managed shops open over a year rose 3.7 percent in 18 weeks to May 7, slowing down from growth of 4.2 percent in the first eight weeks of the year.
"As has been widely reported, conditions on the high street were softer in March before recovering in recent weeks; these conditions were reflected in our own performance," Greggs said.
The retailer said the growth it did achieve was driven by improvements made to its shops and product range, such as its hot sandwiches and extended breakfast menu.
"Input cost inflation remains low despite increased wage costs and, with a strong pipeline of product initiatives and plans to invest in our shops and supply chain, we expect to make progress in line with our previous expectations," Greggs said.
Greggs is two years into a five-year plan to convert the firm from a traditional bakery business to focus on Britain’s more than 6-billion-pounds ($8.65 billion) a year market for food on the go.
Prior to Monday's update analysts were on average forecasting a 2016 pretax profit of 77.6 million pounds, according to Reuters data, up from 73 million pounds in 2015.
Shares in Greggs rose 2.7 percent to 1,097 pence in early trade on Monday.