Hot weather sees softer trading in June and weighs on FY profitability Greggs provided an unscheduled trading update this morning in which it noted trading momentum had softened at the end of H1, with LFL sales growth of just 2.6% now expected for the period (Q2: +2.8%). This implies a slowdown from the +3.8% achieved in the 7-week period to 20 May and reflects the negative impact of hot summer weather on consumer consumption patterns in June (<2% implied LFLs). With price increases of c.4%, it implies LFL volumes were down c.3% in the month. While momentum should improve in H2 against easier comps, the softer H1 trading and likely continued hot weather through July means the Group now anticipates FY25 operating profit could be below the £195m delivered in FY24. The yoy decline is expected to more pronounced in H1 against a strong prior year comparative and reflecting phasing of refurbishments and cost saving initiatives. Goodbody view Overall, with shares -30% ytd and trading on 15x P/E (vs. historic average closer to 20x), market expectations had clearly been lowered. That said, we expect today’s update to be poorly received by the market with softening momentum and lowered guidance and uncertainty around a timing of the recovery. We currently forecast Group operating profit of £204m, though are likely to lower this c.7% to £190m to reflect today’s update. We expect consensus EBIT, which was £199m prior to today, to fall c.5%.