29 July 2025
If you are covering Greggs’ latest results, please find below a comment from Mamta Valechha, consumer discretionary analyst at Quilter Cheviot:
“Following Greggs’ unscheduled profit warning earlier this month, the company has provided a little more detail on what has gone on. It has confirmed that the guidance for profit has been downgraded to levels below 2024, hitting what was meant to be ‘another year of progress’.
“Earnings before tax are down 7%, coming in a bit better than consensus expectations, but footfall is much lower as a result of the hot weather seen towards the end of spring and the beginning of summer. This has hampered revenues and been the main driver of the profit decline.
“The company is continuing to look at diversifying its offering, however, perhaps to help remove some of those risks seen in its stores. It announced this morning that it has signed a new contract with Tesco, which will see its ‘Bake at Home’ range on offer in the UK’s largest supermarket chain from September, building on the success the product range has had in Iceland.
“Greggs is also trialling different offerings such as in-store kiosk ordering and a trial of a ‘bitesize greggs’ in locations where space is limited. However, while these strategic initiatives are positive developments, the food on the go market remains tough with inflation biting into consumers’ wallets. That said, data shows that Greggs is executing strongly in a tough market with a strong and improving price/quality perception and with stable to improving market share. Despite the challenges of late, the share price is arguably looking cheap given the runway of opportunities in front of the company right now.”
