Greggs reports slowdown in sales but backs FY expectations

(Sharecast News) - Bakery chain Greggs reported a slowdown in sales on Wednesday, pinning the blame partly on a "heat-affected" July, but reiterating its outlook for the full year. In the 13 weeks to 27 September, total sales were up 6.1%, down from 7% growth in the first half.

Meanwhile, company-managed shop like-for-like sales rose 1.5%, down from 2.6% growth in H1.

Greggs said that while unusually high temperatures persisted throughout July, holding back its performance during the month, trading improved in August and September in more stable conditions. Year-to-date total sales are up 6.7%, with LFL sales 2.2% higher, it said.

The company - famous for its sausage rolls - now expects around 120 net new shop openings for the year as a whole, slightly lower than its previous estimate, "reflecting the timing of opportunities".

"Greggs continues to make progress despite challenging market conditions, evolving its offer further and making the brand more convenient for a wider range of customers through disciplined estate expansion," it said.

"Our two new distribution centres in Derby and Kettering are on track to open in 2026 and 2027 respectively and will support the next phase of this growth. Operational costs have been well managed and the outlook for cost inflation in 2025 is marginally improved. The board's expectation for the full year outcome is unchanged and we remain clear on the strategic opportunities that lie ahead."

At 1000 BST, the shares were up 7.8% at 1,728.40p.

Dan Coatsworth, head of markets at AJ Bell, said: "The fact life hasn't got any worse for Greggs was enough to breathe some life into the share price. It says trading has improved over the past few months, it is getting cost pressures under control, and full-year guidance has been maintained.

"Don't be fooled into thinking the king of sausage rolls is sitting upright on its throne, with nothing to worry about. The share price jump is a mixture of relief and a short squeeze, not a celebration of significant progress.

"Like-for-likes sales are still pedestrian despite ongoing product innovation that should have drawn in the crowds. There is a nagging feeling that Greggs is growing too fast in the face of fierce headwinds."