Greggs — Improving trend through the quarter

Greggs’ Q325 trading update shows improving trading as the period progressed, following the already-flagged negative effect of July’s hot weather. With a slight improvement to the outlook for cost inflation, management’s expectations for full year profit are unchanged. This is despite indications of lower new space growth than initially guided, due to phasing of new build opportunities. Management was clear that there is potential for significantly more than 3,000 stores, and returns will not be sacrificed as the estate grows. The company is now lapping weak comparatives from Q424, and with ongoing menu innovation as well as new initiatives, such as the expanding partnership with Tesco, management is hopeful of better revenue growth.