Shares of Newcastle-based Greggs fell as much as 13% on Tuesday despite the firm reporting that 2024 sales rose 11.3% to a record high of £2.014 billion and pre-tax profit increased 8.3% to a record £203.9 million.
Total dividend per share rose 11.3% to 69p.
Greggs employs 33,000 people and shares 10% of its profits with staff who have been with the firm for six months or more, which this year will see its workers share £20.5 million.
In her outlook, Greggs CEO Roisin Currie said: “Like-for-like sales in company-managed shops have increased by 1.7% year-on-year in the first nine weeks of 2025 with challenging weather conditions in January followed by improved trading in February.
“We have a strong pipeline of new shop openings ahead as we pursue our ambitious growth plans and invest in the supply chain capacity that supports this. Management’s expectations for 2025 are unchanged and we are confident that Greggs can manage inflationary headwinds and deliver another year of progress in 2025.
“I remain optimistic about the many growth opportunities available to Greggs and have great confidence in our people’s ability to unlock them.”
Currie added: “2024 was another record-breaking year for Greggs; we exceeded £2 billion in sales for the first time and opened our 2,600th shop. Our people have worked tirelessly to deliver on our strategic ambition to further establish Greggs as a multi-channel food-to-go retailer and I want to acknowledge their efforts.
“It is thanks to their hard work, week after week, that we continue to grow, all the while maintaining the great prices, high-quality products, and friendly service that keep our customers coming back, again and again.
“In 2021, we set our sights on doubling sales by 2026 and having a significantly bigger business over the longer term. Three years into this five-year plan, sales are on track and we continue to be confident in the growth opportunity in front of us.
“The brand is in better shape than ever, with a material opportunity to continue growing and developing the Greggs estate and plenty of scope to continue to grow in newer dayparts and channels.”
REACTION:
Richard Hunter, Head of Markets at interactive investor: “Coming so soon after a recent trading update, there are few surprises within the numbers. Revenue of £2.01 billion was up by 11.3% on the year previous, while pre-tax profit grew by 8.3% to £203.9 million. Like-for-like sales rose by 5.5% where growth of 6.3% had been expected, with a weak final quarter which was not well received by the market and resulted in a share price dip of 10% on the day. Net cash fell from £195 million to £125 million, although this should provide some headway in the face of the undoubted cost challenges to come this year.
“Indeed, those challenges of higher costs resulting from the measures announced in the Budget come alongside weaker consumer sentiment, elevated interest rates and a relatively stagnant food-to-go market. This combination has led to a situation which has erased any progress the share price may have made over the last five years. The shares are down by 24% in the last year alone, as compared to a gain of 6% for the wider FTSE250, 39% lower than the high reached in December 2021 and 34% below the most recent spike which was hit last September.
“A projected dividend yield of 3.3%, which rises to 5.2% including specials, is something of an attraction given the price decline and optimism remains that Greggs is a company which has identified and continues to target its areas of strength. The group remains defiant and confident despite the challenges to come, and the market consensus of the shares as a cautious buy echoes some of this optimism, despite another initially glacial reaction to the update.”
Matt Britzman, senior equity analyst, Hargreaves Lansdown: “2024 was a year of highs and lows for sausage roll maker Greggs as it surpassed £2bn in revenue for the first time, though conditions deteriorated over the year. Greggs has limited influence over consumer sentiment but continues to perform well in a tougher environment, with its value-focused offering helping to maintain market share.
“At best, like-for-like sales growth of 1.7% over the past couple of months can be described as robust, and management’s comments that trends improved in February are fairly encouraging. However, 2025 is shaping up to be a tricky year; consumers are hardly flush with cash, and costs are set to rise as Rachel Reeves’s budget measures take effect.
“It’s good news, then, that the company’s growth engines – store expansion, delivery options, evening trade, and digital channels – are all showing continued momentum, giving investors some hope that Greggs can keep pushing forward despite sector headwinds.”