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(Reuters) - Britain's Whitbread, which runs the Costa Coffee chain and Premier Inn hotels, reported a 7.6 percent rise in first-quarter sales on improved trading at both its businesses.
Whitbread, which had previously warned that it sees tougher trading ahead, said on Wednesday that the performance in the 13 weeks to June 2 was in line with its expectations.
However, at least three analysts said the first-quarter update beat their estimates, sending shares in the company up 5.1 percent to 4,050 pence by 0720 GMT, the biggest gainer on the FTSE 100 index.
Deutsche Bank, in a client note, called the update "reassuring" with positive numbers in all businesses.
First-quarter sales at the Costa Coffee chain rose by 8.7 percent while Premier Inn's total sales were up 9.2 percent, with revenue per available room at its London properties rising by 2.8 percent.
"Costa has started the year well and Premier Inn continues to win share, albeit in a weaker than expected hotel market.", Whitbread said.
Sales at Costa Coffee stores running for over a year rose 1.1 percent for the 13 weeks to June 1, reversing a 0.8 percent contraction seen in the preceding 13 weeks, which was the final quarter of the previous financial year.
Sales in Costa were also helped by a steady performance at its drive-through travel format stores and the introduction of a new breakfast range towards the end of first quarter, Whitbread said.
Whitbread said it remained on track to open about 4,200 hotel rooms and 230-250 Costa coffee shops this year.
Reporting by Rahul B in Bengaluru; Editing by David Goodman and Susan Fenton