Shares in Whitbread (LON:WTB) have jumped in London this morning as the company reported that its sales had grown in the first quarter of its financial year. The blue-chip group also said that it was making ‘good progress’ in preparing the demerger of its Costa Coffee business.
As of 08:45 BST, Whitbread’s share price had added 1.34 percent to 3,945.00p. The stock is outperforming the broader UK market, with the benchmark FTSE 100 index having slipped marginally lower and currently standing 0.05 percent in the red at 7,533.91 points.
Whitbread posts Q1 results
Whitbread reported this morning that total sales had grown 3.2 percent in the first quarter of its financial year, and the company expected to deliver full year results in line with forecasts. The group’s UK like-for-like sales, however, fell 1.3 percent during the reported period, with LFL sales at Costa Coffee falling two percent.
“Whilst we are cautious of shorter-term trading conditions in the UK […] we are confident that we have the right strategies in place to enhance our UK and international market positions and ensure each business is well-positioned to thrive as a separate entity,” Whitbread’s chief executive Alison Brittain commented in the statement.
The FTSE 100 group, which unveiled plans earlier this year to spin off Costa Coffee amid investor pressure, said that it had taken ‘constructive early steps’ in preparation for the demerger and that ‘good progress continues to be made’.
Analysts weigh in on update
“We have been seeing and warning about declining like-for-like at Costa for some time and this 2% drop is a concern about how the brand is performing on the High Street,” analyst Neil Wilson from Markets.com told the BBC, commenting on the sales fall at Whitbread’s coffee business. “Lower footfall is one thing, but we continue to see Costa facing tougher competition from artisan coffee retailers who are taking market share.”