REG - Greggs PLC - Q3 Trading Update

GreggsAnnouncement

04/10/2022 07:00

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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 £120 million (previously expected to be £170 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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