Shares in Greggs (GRG) softened 1% to £15.58 after the food-to-go retailer posted a drop in FY25 profits. The Newcastle-based baker also reported a sales growth slowdown for the early weeks of 2026.
| Share price: £15.58 | PE: 12.6x |
| Market cap: £1.59bn | Yield: 4.4% |
And the damage might have been worse had the sausage roll seller not reiterated guidance for stable FY26 profits.
Slow start to 2026
Greggs is the British brand beloved by cash-strapped consumers for its cut-price coffees, sweet treats and goujons.
Like-for-like sales in company-managed shops grew 1.6% in the first nine weeks of 2026.
That represented a slowdown on the 2.9% growth delivered in last year’s Christmas quarter. The mellow performance reflected challenging market conditions as well as lower price inflation.
Greggs maintained guidance for FY26 profits at a similar level to 2025. However, management warned any year-on-year improvement is ‘contingent on a recovery in the consumer backdrop’.
For FY25, Greggs suffered a 9.4% drop in pre-tax profit to £171.9 million despite total sales fattening up 6.8% to £2.15 billion.
Like-for-like sales rose 2.4%, with a particularly hot spell in June and July crimping footfall.
Boosting brand access
Greggs opened a net 121 stores in 2025, ending the year with 2,739 shops. Evening remains the fastest growing daypart, accounting for 9.4% of company-managed shop sales.
The top-line is also benefiting from expansion of its range with Iceland and the successful launch of a ‘Bake-at Home’ range with Tesco (TSCO).
Showing resilience
‘Greggs delivered a resilient performance in 2025, growing market share, alongside continued strategic progress,’ commented CEO Roisin Currie.
‘Looking into 2026, easing inflationary pressures should provide some support to consumer spending and demand for convenient food-on-the-go continues to underpin the market’ , said Currie.
‘We remain focused on broadening access to Greggs with a strong pipeline of shop openings, exciting launches and deeper customer engagement via the Greggs App.’
There are several reasons why Greggs is London’s most-shorted stock and trades on an undemanding valuation.
Sales growth has slowed due to weak consumer spending, fierce competition and weight-loss drug headwinds. Bears argue that Britain may have seen ‘peak Greggs’ in the wake of the company’s rapid expansion in recent years.
Given these risks, we think it is too early to call the recovery. That said, Greggs looks an interesting longer-term story.
Management sees a clear opportunity for significantly more than 3,000 UK shops. And keep in mind, Greggs is the UK’s leading food-to-go brand and continues to take share in a tough market.
Bulls can also start to look to a post peak capital expenditure (capex) phase of stronger cash flow generation as capex falls.
Disclaimer: The author James Crux has a personal investment in Greggs
Read the press release here: https://corporate.greggs.co.uk/investors
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