The business said it had achieved “resilient sales” of £197 million, which was a 2% reduction (£4 million) on 2024, in the face of market volatility. Walker’s attributed this to customer stock-building activity in 2024, alongside “more cautious” ordering patterns during 2025.

Operating profit reduced to £6.9 million, down from 2024’s £16.1 million. Commodity and utility price increases, specifically wholesale butter prices, combined with labour cost pressures adversely impacted margins during the year, said Walker’s.

Domestically, trading was impacted by cautious customer ordering patterns, while internationally, the Unites States presented difficult trading conditions, which Walker’s said was mainly due to the effects of tariff implementation.

Operationally, the business said it absorbed the impact of significant commodity and utility price escalations. Of particular significance was the escalation in butter costs compared to the previous year as well as continuing global affairs causing uncertainty in terms of availability. Ongoing labour cost increases and continued sector-wide labour shortages meant “necessary increased utilisation” of premium-paid overtime hours, as Walker’s claimed that the combined business pressures impacted margins.

However, domestic and international demand for Walker’s “remained high” with around 50% of produce exported to around 100 different markets.

Trading environment both “challenging and complex”

Nicky Walker, managing director of Walker’s Shortbread commented: “The Board took a deliberately cautious outlook for 2025, following a period of significant and sustained growth as the world recovered from the pandemic years. We were prepared for market headwinds and tough trading conditions, but the unprecedented convergence of US tariffs, shifting customer inventory patterns, continued governmental wage regulations and a significant double-digit % year-on-year increase in wholesale butter prices impacted our bottom line.

“While the external trading environment remains both challenging and complex, particularly regarding geopolitical factors and sector-wide labour availability, we are managing this from a position of historic strength. We continue to focus on the areas within our control and driving operational efficiency and maintaining an unwavering investment in our brand and our people is of paramount importance and we remain highly confident in the future of the business.

“Above all, Walker’s will continue to operate as a sustainable, environmentally conscious, family owned and managed business, based in the Highlands, with continued dedication to baking and bringing our finest quality produce to our much valued and loyal consumers.”