Greggs has highlighted bad weather as being a factor in a fall in the company's pre-tax profits for the past year.
The high street bakery experienced a 2.2 per cent drop in levels to £51.9 million with like-for-like sales also tumbling 2.7 per cent adding to disappointing preliminary results for 2012. The company's new chief executive officer Roger Whiteside noted that the UK had been through the wettest year on record for 100 years and this had had a significant impact on the chain's performance over the last 12 months.
However, there was some cause for optimism as total sales had increased by 4.8 per cent to £735 million which was aided by the strong performance of the firm's fresh coffee range. The hot drinks business experienced a 23 per cent boom while the company's frozen products, which are supplied exclusively to Iceland, also aided the rise in overall sales.
Arun George, analyst at Edison Investment Research, told The Grocer: "Greggs' outlook has been downgraded with a minimal growth in profits but the lack of any drastic change in strategy by the new chief executive officer suggests that the Greggs' model is not fundamentally broken.
"From a medium-term perspective, Greggs is utilising its cash flows to stabilise and subsequently grow like-for-like sales and margins. The shares will likely be under pressure today partly due to its strong run."
Greggs has been rapidly expanding over the past number of years becoming a prominent feature on many high streets across the UK. The company recently began unveiling a series of 'Greggs moment' outlets which cater to those wanting to have a sandwich and coffee and this expansion has been instrumental in boosting overall sales.
However, the heavy rainfall over the past year has been a deciding factor in the fall in profits and Whiteside highlighted this fact when delivering the financial results: "If you don't go out for a sandwich [at Greggs] on Monday because it’s raining, you’re not going to buy two on Tuesday."