Greggs plc (LON:GRG)’s full year like-for-like sales rose 17.8% in company-managed shops. This included a strong fourth quarter, helped by a positive reaction to festive products and the non-repeat of Omicron-related challenges.
Greggs has seen growth in the use of its loyalty rewards offering through the app, which the group says is linked to customers seeking value. The “strong” trading and cost control means full year profits are expected to be reported in-line with expectations.
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186 shops were opened in the year, including 70 franchises and 39 shops were closed. 21.5% of Greggs shops now have extended opening hours until 8pm.
Greggs finished the year with a cash position of £191m.
The group expects to add 150 stores to its estate in the new financial year. Greggs remains confident that its value offering will remain attractive to customers but sees “material cost inflation” in the short-term.
The shares rose 1.0% following the announcement.
Greggs' Earnings
Sophie Lund-Yates, Lead Equity Analyst at Hargreaves Lansdown:
“Greggs is seeing increased usage of its app loyalty rewards scheme, as customers flock to value during the cost-of-living crisis. The bakery-chain’s pricing is being held as a key area of strength in current conditions, and has meant that together with cost savings, margins have held up for the full year.
Specifically, demand has been helped by a strong reaction to Greggs’ festive goods, including the Festive Bake and vegan options.
Greggs is so confident its strong trading will continue, it’s planning to open 150 shops this year, and is continuing with extended opening hours at over a fifth of its sites. Later-day trading is proving popular as the group rolls out click and collect options.
Essentially, Greggs has a lot going in its favour because it exists at the end of the value spectrum, and the group is capitalising on this. However, it will be crucial to closely monitor how out-of-home spending shapes up, because any worse-than-expected drop offs would be bad news for profits when combined with soaring costs.”
