Greggs PLC has little to shout about after a year of slowing trade, according to Shore Capital, which says the bakery chain now faces a period of flat earnings and rebuilding its cash buffer.
Preliminary results for 2025 on Tuesday showed total sales up 6.8% to £2.15 billion, with like-for-like growth of 2.4%. Shore notes this “implies negative LFL volumes through the year”.
Market share improved, with share of visits rising 0.5 percentage points to 8.6%.
Trading has softened further into the new year, Greggs revealed alongside results, with total sales up 6.3% but like-for-like growth slowing to 1.6% in the first nine weeks, “strongly suggestive of another period of LFL volume contraction”.
Shore, which reiterated its 'hold' stance, said an amalgam of the higher UK government-imposed cost inflation, tough trading conditions and significant infrastructure investment is weighing on performance.
This “leads to a business looking at declining to broadly flat EPS for a period of time”, with a balance sheet that “needs to rebuild over the next couple of years… before it can recommence its track record of shareholder-friendly activities, notably the flow of special dividends.”
Shares in Greggs rose 1.15% on Tuesday, one of fewer than 20 stocks on the FTSE 350 in green amidst heavy selling related to the Iran war.