Bad Economy Headlines in Newspapers

A new months brings a new round of economic data, but investors in London may be more interested in Greggs, which has been the taste of the City this year, with its shares up almost 60% this year on the back of the positive reception for its new vegan sausage roll.

Last time we heard from bakery chain, in July, it had beaten the high street gloom with a 10.5% jump in like-for-like sales of its pasties, sending the shares sizzling up to an all-time high of almost £25.

Analysts at UBS were still bullish on Greggs last month, reckoning the baker still had plenty of room to grow, and could increase the number of branches by half, to a total of 3,000 in UK.

The bar is set high for its third-quarter trading update due on Tuesday, 1 October, and shares may crumble a bit if expectations are missed.

Investors will be looking to see whether Greggs has sustained its tasty LFL sales growth, which broker Peel Hunt expects will simmer down to a modest 6% in the second half of the year.

Analysts expect sales to stay strong, but warns the main concern for Gregg’s forecast will be the price of pork, which has been rising after African swine fever hit Chinese farms.

All about the US for Ferguson as UK demerges

Having announced in early September that it will be spinning out its UK operation into a separate business, as well as replacing its chief executive, there could be some extra pressure for Ferguson’s US business to deliver in its full-year results on Tuesday.

The group is planning to detach its British operation, Wolseley, and list it as a separate business, with the remaining parts of the company to potentially re-list on the US market.

Peel Hunt is expecting the firm’s American operation to keep growing its market share, mostly through bolt-on acquisitions and organic growth, however, it may be too early for any further news on the UK demerger or a review of its stock market listing.

Meanwhile, a mixed picture for the US economy, amplified by a recent interest rate cut from the Federal Reserve, may prove a concern for some given the pivot towards North America.

For the figures themselves, UBS is predicting the firm will report sales of US$21bn, 5.3% growth in like-for-like (LFL) sales year-on-year and an underlying pre-tax profit of US$1.5bn.

For the US business, the Swiss bank expects fourth-quarter LFL sales growth of 4%, up from 3.5% in the third quarter.

Tuesday 1 October:

FinalsFerguson PLC (LON:FERG), James Halstead PLC (LON:JHD), Scs Group PLC (LON:SCS)

Trading statementsGreggs PLC (LON:GRG)

Economic data: Manufacturing PMIs from China, UK, EU and US, Aus rate decision, EU inflation