Costa coffee owner Whitbread (LON:WTB) recorded a 7.6 percent boost in sales during the second quarter of the year, sending shares up nearly 5 percent.
The sales figures were boosted by strong performance at Premier Inn and Premier Inn Restaurants, which saw a 3.5 percent rise in like-for-like sales in the 13 weeks to 1st June 2017. Its Costa chain also saw a 1.1 percent rise.
Whitbread’s Chief Executive Alison Brittain said the Premier Inn division had benefitted from a “resilient hotel market and the contribution from the 9,000 rooms opened over the last two years”.
“We have had a good start to the year, with first quarter sales growth of 7.6%, in line with our expectations. Our continued drive to grow and innovate in our core UK businesses, focus on our strengths internationally and build capabilities to support long-term growth, combined with our ongoing cost efficiency programme, gives us confidence that we will make further good progress this year”, Brittain said.
Sales at the Costa coffee chain were driven largely by “expanding travel and drive thru channels”. Performance has been weaker than expected for several quarters, with the group facing strong competition from independent brands and coffee bars.
Neil Wilson, senior market analyst at ETX Capital, said: “Like-for-like sales growth at Costa continued their slow decline as the nation switches to a wider array of pricier artisan coffees.”
Shares in Whitbread are currently up 4.80 percent at 4,038.00 (0921GMT).