LONDON — Bakery chain Greggs P.L.C. expects full-year profits to fall after adverse weather in January and March delivered a hit to like-for-like sales. The announcement sent the company’s share price tumbling to as low as 421.5p in early trading, down 9% from the close of 462.5p on April 26.
“We do not expect a significant improvement in the difficult underlying market conditions in the short term,” the company noted in an April 29 interim management statement. “The business is focused on continuing with our plans to invest in core sales performance whilst taking action to reduce costs. Although we are only four months into the year, based on current own shop like-for-like performance, we believe that profits for the year are likely to be slightly below the lower end of the range of market expectations.”
Greggs said market expectations for the year ending Dec. 28, 2013, are in the range of £47.5 million to £55.2 million.
If profits do fall, it would mark the second consecutive year for such an event. Greggs said it is continuing to experience “lower footfall” across much of its business, even as average transaction values have increased marginally.
“Our new shop openings remain focused on locations that have been less impacted by lower footfall such as workplaces, travel and leisure destinations,” the company said. “With the consumer remaining under pressure, sales of promotional deals have been particularly strong with a slight impact on margin, and we expect this trend to continue.”
Sales in the past 17 weeks were up 3%, due in large part to 18 new store openings, a successful partnership with Moto service stations and an extension of Greggs-branded frozen food sold in Iceland supermarkets.