UK bakery chain Greggs Plc has maintained its annual guidance after posting a 2.9% increase in like-for-like sales over the first 20 weeks of the year. The company reported stronger performance in the most recent 11-week period, aided by improved trading conditions.
Total sales for the period to May 17 rose 7.4% to £784 million. Greggs also kept its cost inflation outlook unchanged.
Highlights for the first 20 weeks of 2025
· Total sales up 7.4% to £784 million
· 2.9% LFL* sales growth, with improved performance in the last 11 weeks supported by better trading conditions
· 66 gross new shops opened, 20 net openings, 2,638 shops now trading
· Strong pipeline, remain confident in 140-150 net openings for the full year
· No change in cost inflation expectations
· Investments to increase supply chain capacity on track; in line with project plan and budget
· Board’s expectations for the full year outcome remain unchanged
* Like-for-like (LFL) company-managed shop sales performance against comparable period in 2024.
According to Peel Hunt analyst Jonathan Pritchard, Greggs shares have risen 5.8%, but the underlying performance is less impressive than it appears.
He warns that while the top-line growth looks encouraging, it masks underlying volume declines, with recent gains driven mainly by price increases implemented in December and recent weeks.
“This may come as a slight disappointment to the market, especially given the favourable weather during the period,” Pritchard noted.
He added that lower-income customers continue to feel the strain, impacting overall demand.
Greggs introduced further price hikes of up to 2% to counter rising cost pressures during the period
Comment: The artery clogging/pancreas blasting group appears to be back in favour in the High Street, but it looks like it will be something of a stretch for the shares to break early 2025 resistance at £22, even after today’s update.
