Sparks - Greggs

Greggs’ Q325 trading update indicates an improvement in trading as the period progressed, following the already-flagged impact on trading in July from the hot weather. However, trading remains relatively weak, given Q325 growth was lower than reported through H125 and was against an easier comparative. Looking ahead to Q425, Greggs has a much easier comparative to compete against. With a slight improvement to the outlook for cost inflation, management’s expectations for full year profits  are unchanged.

Overall, trading remains relatively low, with like-for-like sales growth in company-managed stores in Q325 at 1.5%, compared with c 2–3% growth reported for H125. It benefited from a slightly easier comparative from last year of 5% versus over 7% growth in H124. This gives year-to-date like-for-like growth of 2.2%. Total sales growth, which includes space growth and B2B sales, was 6.1% in Q325 and 6.7% year-to-date.

Operationally, the company is making good progress. However, management now expects 120 net new store openings this year, lower than the 140–150 previously guided. This is attributed to the timing of opportunities, and management points to a strong pipeline for 2026.