Greggs PLC (LSE:GRG)’s fourth-quarter trading update was warmly welcomed by analysts on Wednesday as the bakery chain unveiled a jump in revenue.
A jump in like-for-like sales caught the eyes of many, given the figure came in 13.7% higher for the year and up 9.4% in the final quarter.
This was the result of “extended opening hours, more delivery options, improving supply chain capacity and a fresh new suite of tasty treats”, Hargreaves Lansdown equity analyst Matt Britzman explained.
Indeed, Greggs reported its partnership with UberEats had extended delivery to 710 stores by December, with the company adding festive products had done well.
Greggs reported net new store openings of 145 for the year, meanwhile, leaving it operating 2,473 shops.
Citing reducing inflationary pressures and Greggs’ own positivity, Jefferies dubbed the update “very solid” and forecast profit growth in excess of 10% at the bakery chain next year.
Liberum noted the growing number of stores was part of Greggs’ bid to operate around 3,000 sites by 2026, in turn generating £2.4 billion in sales.
Sales came in at £1.8 billion for 2023, Greggs said on Wednesday, prompting Liberum to class a ‘buy’ rating as “the right call”.
“Bears may point to sales growth slowing over the year and the fourth quarter was the lowest of 2023,” Britzman said.
“That’s largely because Greggs was able to limit price hikes as inflation cooled,” he explained. “Longer-term, that’s a net positive.”
Shares climbed 5.1% to 2,601.06p.