Vodafone and Greggs reveal disappointing earnings amid market recovery

On Tuesday, May 20, 2025, European markets showed signs of recovery following a lackluster trading session the previous day. Investors were optimistic as they awaited results from major U.K. companies, including Vodafone Group, a telecom giant, and Greggs, a popular bakery chain. Both firms were set to release their first-quarter earnings after a challenging period exacerbated by economic fluctuations and changing consumer demands. Analysts had predicted Vodafone would report total sales of £31.74 billion and a pre-tax profit of £1.84 billion, alongside significant adjustments due to an impending merger with competitor Three that could impact short-term cash flow. In anticipation of these earnings calls, the British pound gained strength against the U.S. dollar, rising by 0.2% to trade around $1.338. This upward trend followed a substantial 0.6% increase from the previous day after the U.K. and the EU reached a pivotal agreement to reset their post-Brexit relations. The agreement aimed to ease economic pressure in the region, contributing to the positive sentiment expressed by market analysts. European bourses were expected to open higher, with indicators suggesting significant gains for major indices like London’s FTSE, Germany's DAX, France's CAC 40, and Italy’s FTSE MIB. The forecast suggested an overall positive outlook as investors eyed potential recovery trajectories. Despite the optimism surrounding the broader market, Vodafone's earnings review highlighted potential challenges ahead. Analysts, including those from UBS, warned that while a recovery in German service revenues could support stock performance, ongoing concerns regarding cash flow management would likely weigh heavily on the company’s stock price in the near term. Likewise, earnings predictions for Greggs were closely monitored, as rising food costs and competition posed risks for the brand in the current economic landscape.