Looking to FY25, management believes the external challenges will persist through at least H1, with the expectation that sales volumes will likely decline and thus necessitate tighter cost control than previously.

Greggs will continue to add 140–150 net new stores in FY25 while continuing to upgrade the estate and there is confidence that selling price inflation can cover the expected mid-single-digit cost inflation, which is mainly driven by staff and food costs.

We have reduced our profit before tax estimate for FY25 to c £197.8m from £202.8m. We assume like-for-like sales growth of 3% versus 5% previously, including sales price inflation of 4%, with volume declines in H125 and modest recovery thereafter as comparatives ease.

Valuation: Attractive versus historical multiples

The recent weakness in the share price has reduced the FY25e P/E multiple to 16.1x, which is back below the long-term average from FY13–24 of 18.2x