U.K.'s `Beast From the East' Storms Take a Bite Out of GreggsBy
Disruption caused by the “Beast from the East” snowstorms, which hit the U.K. in February and March, has been blamed by numerous companies for disappointing results in the first quarter. On Wednesday, a U.K. sausage-roll seller became the latest.
Shares of Greggs Plc plunged as much as 19 percent, the most on record, and wiping out all gains made over the past 12 months. The company said in a statement that it experienced weak customer traffic in recent months, especially in “weeks of severe weather when many shops, including our own, could not be opened.”
The baker said it expects full-year underlying profit to be “at a similar level to last year,” which analysts said indicated profits about 7 percent below expectations. Greggs had been trading at a high multiple, and today’s warning -- which can largely be blamed on the weather -- means the “halo has now slipped,” Peel Hunt analyst Jonathan Pritchard wrote in a note. He cut his rating to reduce from hold.
Sausage rolls and sandwiches can be added to a growing list of stocks and sectors hurt by the so-called “Beast from the East” storms. Car insurers to fashion retailers, pub operators to sugar producers have all bemoaned the impact of the bad weather. At the same time, Bank of England economists cut their growth forecasts, U.K. household spending slowed and retail sales sunk, illustrating the wider economic impact of freezing weather.