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Greggs holds dividend as profit falls amid ‘challenging’ first half

ALN

Greggs PLC on Tuesday backed annual guidance despite reporting a drop in first half profit as poor weather hit trading.

In response, shares in the Newcastle upon Tyne bakery chain fell 4.5% to 1,571.00 pence each in London on Tuesday morning. They had earlier traded down at 1,499.00p, the lowest level since 2020.

Pretax profit fell 14% to £63.5 million in the 26 weeks to June 28 from £74.1 million a year prior, although revenue rose 7.2% to £1.03 billion from £960.6 million.

Diluted earnings per share decreased 16% to 45.3 pence from 53.8p.

Greggs said company-managed shop like-for-like sales rose 2.6% with franchised shop LFL sales up 4.8%.

The first half was impacted by ‘challenging market footfall, more weather disruption than in 2024, and phasing of cost headwinds,’ the firm stated.

Greggs explained that heavy snow and strong winds in January and unusually hot weather in June, had a material impact on consumer behaviour and lowered LFL sales.

Evening remains the fastest growing area, the firm said, generating 9.3% of company-managed shop sales, up from 8.4% a year ago, driven by strong demand in higher-footfall locations.

The new frozen manufacturing and logistics site in Derby is now built and the site is expected to be operational in the first half of 2026. In addition, the initial build phase for the National Distribution Centre in Kettering is progressing well, the firm added.

In September, Greggs will extend availability of its frozen ’Bake at Home’ range through a new relationship with Tesco PLC.

Greggs opened 87 new shops in the first half with 56 closures, resulting in 31 net openings, growing to 2,649 shops trading as at June 28. It continues to see a clear opportunity for significantly more than 3,000 UK shops over longer term.

‘After a challenging start to 2025 we remain clear on the strategic opportunities that lie ahead,’ said Chief Executive Roisin Currie.

‘The outlook for cost inflation is unchanged and we are making great progress in building the supply chain infrastructure that will support the next phase of growth. The board’s expectations for the full year are consistent with the guidance provided in our last trading update on 2 July, i.e. that operating profit could be modestly below the level achieved in 2024.’

In 2024, Greggs reported underlying operating profit of £195.3 million.

The interim dividend was maintained at 19.0p per share.

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