Greggs warns of profit dip as heatwave deters customers
UK baker Greggs warned today that its annual operating profit could dip below last year's levels as unusually high temperatures in the UK discourage customers from eating out, sending its shares sinking nearly 15%.
An early European heatwave limited outdoor work, shut schools and spurred health alerts across the region on Tuesday, while in London, temperatures rose above 33 degrees Celsius.
Greggs, known for its sausage rolls, steak and vegan bakes, said that while the scorching weather raised demand for cold drinks, it reduced overall footfall and harmed like-for-like sales in June.
Shares tumbled as much as 14.8% to 1,682 pence. They have fallen about 38% so far this year.
Some analysts were still optimistic on the company despite the profit outlook.
"While obviously disappointing that full-year expectations are nudging back, we do not see this as a reflection on the underlying health of the business," Jefferies said in a note.
Food prices in Britain acceleratedin June by the most since March 2024, pushing up overall shop prices for the first time in nearly a year, according to an industry survey which warned of further price pressures.
Greggs, which exceeds fast food giant McDonald's in store numbers in the UK, expects operating profit in the first half to be lower than in 2024, due partly to the timing of store refurbishments and cost-saving measures.
According to LSEG data, analysts, on average, were expecting Greggs to earn £198.5m of operating profit in 2025, compared with £195.3m last year.
Greggs also today reported total sales of £1.03 billion, up 6.9% year-on-year for the 26 weeks ended June 28.
