Greggs - Profit outlook maintained for FY22

Greggs’ (GRG) AGM trading update (first 19 weeks of FY22) indicates it continues to trade well in what has undoubtedly become a more challenging environment due to deteriorating consumer confidence. Management’s profit expectations for FY22 of no material profit progression are unchanged as it believes further selective price increases will be required to offset higher cost inflation than originally anticipated, which is likely to be the same for its competitors. The prospective P/E multiples have edged back towards the long-term average of 17.9x, which looks attractive given the forecast growth profile.