Shares in Whitbread were up on the FTSE 100 in morning trading after the group reported a rise in sales in the 13 weeks ended 2 June.
Group like for like sales in the period rose 1.7 per cent, while total group sales increased 9.2 per cent.
The group's Costa coffee chain saw the strongest growth in sales, with like for like sales rising 4.0 per cent and total sales rising 22.5 per cent. During the period 73 new Costa stores were opened and the group said it plans to open another 300 stores worldwide.
Whitbread's Premier Inn business reported a rise in like for like sales of 3.0 per cent and total sales of 8.1 per cent, while its Hotels and Restaurants business saw like for like sales increase 1.1 per cent and total sales climb 4.8 per cent.
The group's Restaurants business reported a fall in like for like sales of 1.4 per cent but a rise in total sales of 0.2 per cent.
Andy Harrison, Chief Executive of Whitbread, said, "The trading momentum of the Group in the first quarter was consistent with the outlook at our preliminary results announcement at the end of April. Total sales increased by 9.2% with like for like sales up 1.7% although our business was adversely affected by the extended Easter and Royal Wedding holiday. Since then Costa and Premier Inn have traded well. Premier Inn revpar is continuing to benefit from a stronger London market, whereas in the provinces our Restaurants are being impacted in a more difficult casual dining market.
"We are continuing with disciplined investment in our network to deliver our 5 year growth milestones. We are confident that investing in our strong brand propositions of Premier Inn and Costa and introducing further value offers in Restaurants will enable us to win market share and deliver good returns for our shareholders. In Q1 Costa grew total sales by 22.5% and Premier Inn's total sales grew by 8.1%."
Richard Hunter, Head of UK Equities at Hargreaves Lansdown Stockbrokers, commented, "Some of the disappointment emanating from the full year results at the end of April may be undone by today's update.
"A combination of the numbers missing estimates, along with some words of caution on the outlook from management conspired to drive the shares lower at the full year mark. Today's accompanying comments are rather more upbeat, underlining group progress and disciplined investment in the group network. Total sales showed an impressive growth spurt, whilst within this Premier Inn was the beneficiary of a promising London market. Elsewhere, plans to consolidate the Costa Coffee business continue apace and the general geographic diversity of the group should provide some support to its beleaguered UK market. Whilst concerns remain around the intensity of competition in the markets in which Whitbread operates, the company seems well placed to deliver on its growth plans.
"The share price performance has not reflected the market view of the company of late. The shares have lost 18% over the last six months, as compared to a 3% drop for the wider FTSE100. Nonetheless, if today is to mark a turning point in the company's prospects, the current consensus of the shares as a strong buy will likely remain unchallenged."
By 09:55 shares in Whitbread were up 5.99 per cent on the FTSE 100 to 1,574.00 pence per share.