Greggs Share Price Drops Again Despite Record £2bn Sales in FY24

UK bakery chain Greggs (LON: GRG) reported a record £2.01 billion in total sales for the financial year 2024, marking an 11.3% increase compared to the previous year. However, its share price dropped further on Thursday.

The stock continued to tumble. After falling more than 7% on Wednesday, today's trading update resulted in a more than 9% decline, with the stock currently trading around the 2,384p mark.

Greggs shares are now trading around levels last seen in December 2023. UK-focused names have been under pressure in recent days as the worries regarding the budget announced at the end of October take hold.

Greggs itself said in its latest release that employment costs will result in further overall cost inflation. Even so, they add that wage increases should provide support to consumers.

The company’s latest figures revealed that fourth-quarter sales rose by 7.7%, with like-for-like sales in company-managed shops up by 2.5%. 

This growth, however, was tempered by a challenging market environment, characterised by lower consumer confidence and reduced High Street footfall. 

Greggs managed to maintain its market share, particularly as a leading destination for breakfast, while also keeping operational costs under control.

During FY24, Greggs opened a record 226 new shops, achieving a net increase of 145 locations, bringing the total number of shops to 2,618. 

Roisin Currie, Greggs' Chief Executive, noted the company's resilience amid economic headwinds, stating, “Our value-for-money offer and the quality of our freshly-prepared food and drink position us well to meet the headwinds we expect to see in the year ahead, and we remain confident in the significant long-term opportunity for growth.”

Looking ahead, the company said that despite growth in disposable incomes, consumer confidence was subdued in the second half of 2024, which weighed on industry-wide customer visits and expenditure.  

However, with “good cost management in the final quarter the Board anticipates reporting a full year outcome for FY24 in line with its previous expectations.”