9th Jan 2025 08:58
(Alliance News) - Greggs PLC on Thursday backed annual guidance despite sales growth slowing in the fourth quarter of the year.
The Newcastle-upon-Tyne-based bakery chain said fourth quarter total sales were up 7.7%, slowing from 11% in the third quarter and nearly half the 14% growth reported in the 26 weeks to July 1.
Company-managed shop like-for-like sales rose 2.5% for the fourth quarter, reflecting the more subdued high street footfall, Greggs said, a marked easing from the 5.0% reported in the third quarter.
"Trading performance reflected a well-publicised more challenging market backdrop in the second half of 2024. Lower consumer confidence impacted High Street footfall and industry-wide visits and expenditure," Greggs said in a trading statement.
In response, shares in Greggs slumped 9.9% to 2,366.00 pence each in London on Thursday morning.
For financial 2024, Greggs said total sales increased 11% to GBP2.01 billion from GBP1.81 billion a year prior. Company-managed shop like-for-like sales rose 5.5%. The firm anticipates reporting a full year outcome in line with previous expectations.
Looking ahead, the company acknowledged employment costs will result in "further overall cost inflation, although wage increases should provide support to consumers".
"Greggs has demonstrated its ability to mitigate cost inflation in recent years whilst retaining its value leadership, and we are confident we can continue to do so," the firm added.
Chief Executive Roisin Currie said: "Whilst lower consumer confidence continues to impact High Street footfall and expenditure, our value-for-money offer and the quality of our freshly-prepared food and drink position us well to meet the headwinds we expect to see in the year ahead, and we remain confident in the significant long-term opportunity for growth."
The firm expects to open 140 to 150 new shops in 2025, including 50 targeted relocations. Planning permission has been achieved for a new National Distribution Centre in Kettering.
Greggs expects year-end net cash of GBP125 million down from GBP195 million in 2023.
By Jeremy Cutler, Alliance News reporter
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