Greggs PLC's (LSE:GRG) preliminary results next Tuesday will see investors focused on cost and price inflation, expansion plans and returns.
Analysts at UBS will mostly be looking for further commentary on capital expenditure and return on capital employed (ROCE).
“We believe that Greggs is highly focused on ROCE and has incentivised the management team on the basis of ROCE as well,” analysts at the bank wrote.
UBS believes that with a focus on returns and a strong capital expenditure programme over the next few years, Greggs will seek to improve profit margins to remain a high-ROCE business.
The sausage roll specialist was one of the first high street names to update post-Christmas, delivering a solid fourth quarter where it held full-year guidance.
The retailer said sales for the fiscal year 2022 were £1.5bn, up 23.0%, compared to the previous year with like-for-like sales in company-managed shops 17.8% higher than sales seen in 2021.
Despite the impact of adverse weather and strikes at the end of 2022, fourth-quarter like-for-like sales in company-managed shops grew by 18.2% with seasonal lines in high demand.
Any further update on inflation will attract the eyes of investors, given the importance of margins.
Greggs had previously said it continues to see “material” cost inflation in the year ahead while it noting that consumers are attracted by its “value offering” that implies prices cannot rise too far.