Shares in FTSE 250-listed Greggs plummeted this morning - even though it announced plans to start selling flat whites, the Antipodean coffee crazy taking the globe by storm. Some people are never satisfied.
In a trading update this morning, Greggs said sales rose 5.2 per cent in 2015, with like-for-like sales at its company-managed stores rising 4.7 per cent.
Fourth-quarter sales rose 2.3 per cent, a slowdown on the previous quarter, which Greggs attributed to "stronger comparatives and the impact of weaker footfall in some shopping locations" - presumably the reason shares were down 7.8 per cent to 1,128.54p in mid-morning trading.
Meanwhile, it opened 122 new stores and closed 74, giving t a total just shy of 1,700. And its much-vaunted refurbishment plans are still going: it completed 222 refurbs in 2015, it said.
12 January 2016 @ 10:00amGreggs (GRG)
Why it's interesting
Greggs' transformation from purveyor of sausage rolls to something rather more middle class seems to be going well. The company said growth among its (relatively) recently-launched sandwiches and drinks ranges, as well as its healthy options, had been "particularly strong".
It was a similar story for its hot food menu, which includes hot sandwiches and fresh soups - while mince pies also sold well.
And it looks like Greggs is settling into its more hip persona. The company said this morning it is planning to start selling flat whites - the foamy, single-shot coffee which originated in Australia.
Still - analysts at Shore Capital Markets were cautious about growth this year.
"Greggs is a strong operator in the fast growing UK ‘Food to Go’ market, and we expect a further year of growth in 2016," they said.
"However [following] a very strong 2015, when the stock price appreciated over 70 per cent, we expect a more sedate stock price performance in 2016 and place our buy recommendation under review on valuation grounds."
What Greggs said
Chief executive Roger Whiteside said:
We anticipate that we will report full year results for 2015 in line with our previous expectations. In the year ahead we will continue with the implementation of our strategic plan to enable the business to compete more effectively in the food-on-the-go market.
Fast growth may have caused nervousness among investors - but last year's performance looks encouraging.