10 January 2024
If you are covering Greggs’ latest results, please see the following comment from Mamta Valechha, equity research analyst at Quilter Cheviot:
“Greggs delivered a robust Q4 trading update this morning with full year revenue slightly ahead of expectations, gearing it up nicely for its full year results expected in March.
“Greggs’ Q4 like for like sales are up 9.4% supported by continued growth in transactions numbers, though growth did slow sequentially given reduced contribution from price inflation. Positively, key growth drivers remain intact, with evening trading maintaining its position as Greggs’ fastest growing area. Delivery sales also benefitted as its partnership with Uber Eats has expanded. The delivery service is now offered across 710 stores, far surpassing its original goal of 500 by October 2023, which is in addition to the service provided by its existing partner Just Eat.
“Greggs opened a record 145 net new stores during the year and planned investment into the supply for additional manufacturing and logistics capacity is progressing well. Year-end net cash looks relatively healthy at £195m which will further support future growth and supply chain capacity, with management expecting a further 140 to 160 stores to open next year.
“Management has maintained its stance on full year outcome expectations, and looking ahead to the rest of 2024 Greggs expects a more stable cost base as inflationary pressures ease, with ‘good’ forward cover on food, energy, and packaging costs, though employee real wage growth could be a headwind.
“Greggs has unique growth opportunities and given its compelling proposition, particularly in this tough consumer landscape, we continue to think Greggs offers investors good value.”
