Sparks - Greggs

Greggs has reported FY24 revenue that was exactly in line with our expectations and indicated that profit is for the year is on track to meet its expectations. It was a good year for Greggs, with total revenue growth of 11.3% in the full year and 7.7% in Q424, taking it past £2bn of sales for the first time. On an underlying basis, like-for-like sales growth in company-managed stores was 5.5% for the full year and 2.5% in Q424, with the latter slowing from 7.4% in H124 and 5% in Q324. There was always going to be a natural slowing in sales growth through the year as inflationary cost pressures eased along with the requirement to pass on this inflation to its customers. Greggs does reference a more subdued high street in the second half of the year, indicating that the back end of the year was more challenging. Despite the more challenging backdrop, the company has maintained its market share of visits.

From an infrastructure perspective, the new additional supply chain capacity is on track.

Looking to the coming year, Greggs will continue to add new stores and upgrade its store portfolio through relocations at a good clip and management points to employment costs as being the main area of cost inflation, which is consistent with comments from other companies.