07 March 2023
If you are covering Greggs’ full year results, please find below a comment from Mamta Valechha, equity research analyst at Quilter Cheviot:
“Greggs pulled no surprises in its full year results as current trading remains strong regardless of the economic backdrop. For 2022, sales were up 17.8%, with the fourth quarter alone posting growth of 18.4%. Inflation did take its toll on profits, however, compared to the first half of the year, the deceleration was more contained given the price increases coming through.
“The business has seen a strong start to 2023 too, with sales climbing by 18.8%. Greggs commented that they anticipate cost inflation of 9-10% for 2023, but while that number is high, the overall picture is improving with energy now hedged through to September.
“The early-evening traffic remains the fastest growing part of the business and management now plans to extend opening hours in 300 shops to 9pm, as well as trialling 24-hour drive-thru shops. Management also continues to believe delivery is a viable longer-term opportunity, while Click + Collect will be a key focus in 2023 as Greggs seeks to become a full-service food retailer.
“It has also had strong growth with the Greggs App, with 1.1m active customers in Q4 helping to drive brand health and market share. It continues to do well in spite of the challenges retailers of all types face, and given the undemanding valuation it remains a quality business.”
