Greggs (GRG) H2 2023 earnings summary

Executive summary

• Record 2023 performance: sales rose 19.6% to £1,809.6m and underlying pre-tax profit increased 13.1% to £167.7m.

• Strategic execution expanded the estate, strengthened digital and evening sales, and raised food-to-go visit share to a record 8.2%.

Financial highlights

• Sales £1,809.6m, up 19.6%; underlying operating profit £171.7m, up from £154.4m; underlying profit before tax £167.7m, up 13.1%.

• Exceptional net insurance gain of £20.6m contributed to reported profit before tax of £188.3m; profit after tax was £142.5m, versus £120.3m.

• Underlying diluted EPS rose 5.4% to 123.8p from 117.5p.

Outlook and guidance

• Company-managed LFL sales rose 8.2% in the first nine weeks of 2024; trading remained strong and management expected another year of good progress.

• 2024 LFL input costs expected broadly neutral; total LFL cost inflation forecast at 4–5%, with energy costs marginally deflationary.

• 2024 wage and salary inflation expected at ~9.5%, including a 10% National Living Wage increase and enhanced pension benefits.

• 2024–2026 effective tax-rate guidance: 26.0%, based on current regulations.

• 2024 plan: 140–160 net shop openings, ~170 gross openings, ~150 refits and capital expenditure of £250–280m.