The Greggs plc (LON: GRG) share price fell 3.03% after issuing its trading update for the first 19 weeks of 2023. The British bakery chain reported 17.1% in like-for-like sales, attributing the significant gains to the impact of the Omicorn variant on its Q1 2022 sales.
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The bakery chain opened 63 new stores while closing 26 existing stores that were not performing as expected. The company also noted a robust pipeline of new shop and relocation opportunities.
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The company also noted no change in the cost inflation expectations and continued making progress with its sales growth initiatives. As a result, the company’s board reiterated that its expectations for the full-year results remained unchanged.
Greggs is also investing in specific projects to increase its logistics capacity to match its expanding store count as it looks for more opportunities to open company-manage stores this year. The increased store count will need an expanded logistics network to service it.
The company noted that like-for-like sales in the ten weeks to 13 May 2023 were down to 15.7% and expects the figure to keep normalising over the coming months as the impact of the Omicoron variant from last year fades away.
Greggs has been focused on developing its menu as part of its strategic growth objectives. The company noted that sales of hot food and snacks, including chicken goujons and wedges, are showing robust growth. The company’s pizza has also proved popular with its customers.
The Late Trade Pizza Deal has been driving sales in the evening part of the day. The company has also been expanding its menu of plant-based foods, with the new Vegan Mexican Chicken-Free Bake being the latest addition to the menu.
Greggs is also happy that the chain’s Sweet Potato Bhaji and Rice salad bowl recently won the Healthy Eating award at The Sammies 2023. The company’s total sales during the 19 weeks to 13 May 2023 were £609 million, a significant improvement from the £495 million recorded in a similar period last year.
Given the recent share price rally, the decline in Greggs was driven mainly by selling pressure as buyers took profits on their long positions.
*This is not investment advice.
Greggs share price.
The Greggs share price fell 3.03% to trade at 2756.0p, from Monday’s closing price of 2842.0p.
YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY.