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Greggs improves profit guidance, but tougher times await

Management has warned of increased cost pressures in 2020
Greggs improves profit guidance, but tougher times await

Greggs (GRG) has once again raised profit guidance, as the surprise success of its vegan sausage roll fed into a record performance in 2019.

IC TIP: Hold at 2,441pp

The food-on-the-go retailer’s progress must slow down at some stage, but sales growth accelerated to 13.5 per cent in the year, from 7.2 per cent in 2018. This prompted management to guide to full-year underlying pre-tax profit “slightly higher” than previous expectations. Management is investing in further expanding its store network - now 2,050 strong - with around 100 net store openings in the year.

There are challenges ahead, though. Increases in the price of pork and the national living wage will push up costs in 2020.