Greggs blames the weather as first-half profits drop 14%

(Sharecast News) - Greggs reported a drop in first-half profit on Tuesday, pinning the blame partly on the weather. In the 26 weeks to 28 June, pre-tax profit fell 14.3% to £63.5m, with total sales up 7% to £1.03bn. Operating profit declined to £70.4m from £75.8m in the same period a year earlier.

Company-managed shop like-for-like sales rose 2.6%, while franchised shop LFL sales were ahead 4.8%.

The bakery chain, famous for its sausage rolls, said the first half was affected by "challenging" market footfall, more weather disruption than in 2024, and the phasing of cost headwinds.

Greggs had already cautioned earlier in July that full-year operating profit could be "modestly below" that achieved in 2024. It said at the time that LFL sales in June were impacted as very high temperatures increased demand for cold drinks but reduced overall footfall.

Chief executive Roisin Currie said on Tuesday: "After a challenging start to 2025 we remain clear on the strategic opportunities that lie ahead. Through our disciplined estate expansion and focus on innovation, Greggs is evolving its offer further and making the brand more convenient for a wider range of customers.

"The outlook for cost inflation is unchanged and we are making great progress in building the supply chain infrastructure that will support the next phase of growth. The board's expectations for the full year are consistent with the guidance provided in our last trading update on 2 July."

At 1155 BST, the shares were down 3.3% at 1,591p.

Dan Lane, UK lead analyst at Robinhood, said: "Greggs isn't the plucky market darling anymore and today's results show how hard it is to keep up with the boomtime years.

"Slowing sales growth and noticeable profit drops are a real issue but as much as Greggs talks about expansion, that's not a sure-fire way to course correct. Greggs' UK footprint already serves vast swathes of the country so boosting the store count won't necessarily unlock underserved customer appetites; chances are there was already one within reach. Where this strategy could work is in boosting its presence in travel hubs, following the WH Smith playbook.

"Still, expansion talk can't distract from the fact that Greggs is straying further and further from what the UK knows and loves it for. Offering up a steak bake or sausage roll is very different from taking on Domino's and other established evening meal brands. Turmeric shots and frozen supermarket bakes are further signs that the company risks losing its roots in search of being all things to all people. In short, pinning its hopes on new menus, delivery and new store openings makes for a nervous outlook."