The latest lockdown measures present another obstacle in Greggs’ path to recovery, but the company is now well versed in trying to navigate the pandemic.
“The company’s latest trading update shows it achieved positive trading momentum despite there being tighter restrictions in parts of the UK. That’s very encouraging for when life does start to return to normal,” according to Russ Mould from AJ Bell.
“Like-for-like sales in September equated to 76.1% of 2019’s level. Fourth quarter like-for-like sales averaged 81.1% of the 2019 level, showing a decent improvement.
“Full-year revenue of £811 million is 4% better than the market consensus of £777 million. Guidance for the company to record a full-year pre-tax loss of up to £15 million is also considerably better than the consensus of a £63 million loss.
“Sausage rolls fans who couldn’t live without their Greggs fodder have been flocking to Just Eat to have their favourites delivered to their home or they’ve been nipping to Iceland which sells frozen versions of its products. These additional sales channels have been helpful but are still relatively small potato in the bigger scheme of things.
“It is always sad to hear about news of job losses, with Greggs having to make difficult decisions while the pandemic still rages. Trading may have picked up, but the business is still vulnerable to setbacks, particularly over the next month or so while lockdown conditions have tightened.
“Management remain conscious of keeping a lid on costs while the backdrop remains fragile, but its optimism for life beyond the pandemic seems justified by the latest business performance.”