Greggs has confirmed its profits will fall this year, blaming bad weather for disappointing sales so far.
The company’s like-for-like sales grew just 2.6% in the first half of the year, a slowdown it attributed to January’s heavy snow and strong winds and June’s unusually hot weather.
As a result, operating profits fell 7.1% to £70.4m, with Greggs reiterating its profits for the year would be “modestly below the level achieved in 2024”.
The business issued a profit warning earlier this month that caused its share price to fall to a five-year low.
In a trading update on Tuesday, it said total first-half sales were up 7% due to its continued store estate expansion.
Greggs has invested hundreds of millions of pounds in expanding its store numbers with plans to increase its number of outlets to more than 3,000. This is despite one in five of them already sitting within 500 metres of another.
It has also invested around £240m in new automated production facilities in Derby and Kettering and added a production line to its factory in Newcastle.
“After a challenging start to 2025 we remain clear on the strategic opportunities that lie ahead” said CEO Roisin Currie.
“Through our disciplined estate expansion and focus on innovation, Greggs is evolving its offer further and making the brand more convenient for a wider range of customers.”
Greggs expects inflation to remain around 6% for the rest of the year, a minimal rise from the company’s current level of 5.4%.
It is looking to expand further into supermarkets and will extend its frozen ‘Bake at Home’ range in September through a new relationship with Tesco, adding to its ongoing partnership with Iceland.
Robert Moorhead, former CFO at WH Smith, will join the board as a non-executive director in October, taking over from Kate Ferry who is retiring.
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