Greggs PLC Q3 Trading Update (6288B)
04 October 2022 - 5:00PM
UK Regulatory
TIDMGRG
RNS Number : 6288B
Greggs PLC
04 October 2022
4 October 2022
GREGGS PLC
Q3 TRADING UPDATE
Greggs is a leading UK food-on-the-go retailer,
with more than 2,200 retail outlets throughout the country
Trading in line and full year expectations unchanged
Q3 highlights
-- Total sales up 14.6% for the 13 weeks to 1 October 2022
-- Company-managed shop like-for-like* sales up 9.7% for the 13 weeks to 1 October 2022
-- 90 net new shops opened year-to-date (106 openings less 16 closures)
-- Continue to expect around 150 net shop openings in 2022
-- New autumn menu introduces more vegan-friendly and hot food options
-- New pizza production capacity successfully commissioned
-- No change in cost inflation outlook for the year
-- Full year outcome expected to be in line with our previous expectations
* Like-for-like (LFL) company-managed shop sales performance
against comparable period in 2021
Trading performance
Greggs continued to trade well over the third quarter of 2022
with total sales up 14.6% and like-for-like sales in
company-managed shops rising by 9.7% when compared with the same
period in 2021. As expected, year-on-year growth moderated in
August given the particularly strong 'staycation' effect seen in
2021, however, momentum returned in September. We closed our shops
on 19 September for the funeral of Her Majesty The Queen and this
impacted reported LFL sales growth for the third quarter by around
one percentage point.
Our autumn menu is now available, featuring favourites such as
the pumpkin spice latte and our chicken & stuffing baguette.
Our hot sandwich meal deal, which includes southern-fried potato
wedges and any hot or cold drink, is now available in over 1,000
shops. Our great-value pizza deal continues to be popular all day,
particularly in the growing evening daypart. The broadening of our
vegan-friendly food options has also been well received, and latest
additions to the menu include our 'vegan bean & cheeze toastie'
and the 'vegan southern fried chicken-free baguette'.
Shop estate and supply chain development
In the year to date we have opened 106 new shops and closed 16
shops, giving a total of 2,271 shops trading at 1 October 2022
(comprising 1,860 company-managed shops and 411 franchised units).
Openings in the third quarter included two 'drive thru' sites in
Amesbury and Durham and railway locations at Tottenham Hale and
London's Liverpool Street Station. For the year as a whole, we
continue to expect around 150 net openings, of which around 40% are
planned to be with franchise partners.
In September we commissioned a new automated pizza manufacturing
line at our Enfield site. Product quality is excellent and will
support further growth in this important category as well as
lowering production costs.
Supported by our strong balance sheet, we continue to work on
options for development of further capacity to support our
significant growth ambitions. Some of the planned 2022 costs
associated with this work are now likely to move into 2023 and, as
such, we now expect capital expenditure in 2022 to be around GBP120
million (previously expected to be GBP170 million) with the
difference being deferred to 2023.
Board changes
As previously announced, Matt Davies, currently Chair Designate,
will succeed Ian Durant as Chair of the Board of Greggs on 1
November 2022, when Ian steps down from the Board. Ian has led the
Board through a transformational period for Greggs and, alongside
the improved performance of the business, has championed
significant improvements in diversity and gender balance at senior
levels.
Outlook
The outlook for cost inflation for the year remains consistent
with our previous guidance of c.9% overall like-for-like cost
inflation in 2022 and we now hold an appropriate level of forward
purchasing cover in respect of our fourth quarter requirements for
key food and energy commodities. We also hold significant energy
cover for the first quarter of 2023, with average costs expected to
be below the level of the recently-announced price cap.
Greggs continues to trade well in an environment where cost
pressures are significant and our outstanding value-for-money
positioning is ever-more important to consumers. There remains
considerable uncertainty in the economy as a whole but we continue
to trade in line with our plan and currently expect the full year
outcome to be in line with our previous expectations.
ENQUIRIES:
Greggs plc Hudson Sandler
Roisin Currie, Chief Executive Wendy Baker / Hattie Dreyfus / Nick Moore
Richard Hutton, Finance Director
Tel: 0191 281 7721 Tel: 020 7796 4133
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