Greggs shares sank on Wednesday after the purveyor of the humble sausage roll issued a profit warning following a period of warm weather that knocked footfall in their outlets.
Greggs has cautioned that full-year operating profit could fall below 2024 levels, despite achieving solid sales growth in the first half of 2025.
Shares were down over 13% at the time of writing after the group outlined the impact of rising costs on profits and stuttering sales growth. Greggs shares are trading at the lowest levels since 2020.
The bakery chain reported total sales up 6.9% to £1.027 billion for the 26 weeks ended 28 June. Like-for-like sales grew 2.6%. However, the board now expects annual operating profit to be “modestly below” last year’s performance.
June’s weather proved challenging. Very high temperatures across the UK boosted demand for cold drinks but reduced overall footfall, slowing the company’s sales momentum after a strong May performance.
Refurbishment activity and cost recovery initiatives have been weighted toward the current first half, further impacting margins for the period.
“Greggs might be feeling the heat, but not in the way it hoped. The bakery chain this morning blamed the recent hot weather for softer sales in its latest trading update. Clearly feeling the heat, Greggs share price plummeted 13% and will leave investors wondering if something more serious is cooking,” said Mark Crouch, market analyst for eToro.
“For a brand that’s built its success on affordability and convenience, a dip in demand raises eyebrows, especially when footfall should be strong. Sure, it’s harder to sell a hot sausage roll in a heatwave, but a stretched consumer may be part of the bigger picture. Inflation may be easing, but wallets are still under pressure, and Greggs’ value proposition may be losing a bit of its bite.”
Greggs continues expanding aggressively. The company opened 87 new shops in the first half, closing 56 others for a net gain of 31 locations. Total shop count now stands at 2,649, comprising 2,085 company-managed stores and 564 franchised units.
Management remains confident of achieving 140 to 150 net openings for the full year. However, investors will be concerned that there are deeper issues for Greggs than a warm month of June.