30 July 2024
If you are covering Greggs' half year results, please see the following comment from Mamta Valechha, consumer discretionary analyst at Quilter Cheviot:
"Greggs posted another set of strong results this morning, with like for like sales up 7.4% in line with the update reported in May. Growth has been supported by menu development, including new iced drinks rolled out in time for summer, as well as dedicated pizza deals. Evening sales have also continued at pace with like for like sales growing ahead of the group’s average, albeit from a lower base. The Greggs App has seen participation increase to 18.3%, close to doubling last year’s 10.6%, which is expected to drive higher purchase frequency going forward due to the loyalty scheme on offer.
"Greggs’ profits were up +16%, reflecting its robust sales growth, and has made headway with gross margin recovery (+58bps) as inflation starts to ease.
"The business also continues to invest in its supply chain, with contracts now exchanged for the purchase of land in Kettering for a new national distribution centre which is expected to be operational in 2027 and will service 700 more shops. This is in addition to the two new distribution centres expected to be operational by year end in Birmingham and Amesbury, as well as a frozen site in Derby next year.
"Management has reiterated its outlook, with trading in line with expectations and cost inflation expected to moderate within the range of 4-5% as previously guided. Greggs has unique growth opportunities and a compelling value proposition, which puts it in a strong position particularly in this tough consumer landscape."
