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Yesterday (3 March) was a key date for holders of Greggs (LSE:GRG) shares. The FTSE 250 bakery chain reported its 2025 outcomes for the 52 weeks to 27 December.
1. Complete gross sales are nonetheless rising
Final 12 months, Greggs’ whole gross sales grew 6.8% to £2.15bn. This was pushed by 121 internet store openings and a 2.4% rise in like-for-like (LFL) gross sales at company-managed retailers.
Greggs ended December with 2,739 retailers, and is concentrating on one other 120 internet openings in 2026. So income does proceed to develop.
That mentioned, progress is much from spectacular as a result of strain on disposable incomes. LFL gross sales have been up simply 1.6% within the first 9 weeks of 2026.
2. Income are beneath strain
Underlying pre-tax revenue slumped 9.4% to £172m final 12 months. This mirrored a “tough” market and better working prices, together with the rise in employers’ Nationwide Insurance coverage contributions and rising prices for meals and packaging.
Administration expects much less inflationary strain this 12 months, with earnings coming in at comparable ranges. Any enchancment can be “contingent on a recovery in the consumer backdrop”.
3. The dividend has been maintained
Regardless of the dip in earnings, the board maintained the dividend at 69p per share, reflecting confidence in ongoing money era.
With the share worth at £16, this interprets right into a 4.3% dividend yield.
4. Market share good points
The delicate UK financial system is presenting challenges for all retailers. Nonetheless, for these capable of navigate this difficult interval, there’s an opportunity to develop market share. In different phrases, to emerge stronger on the opposite aspect.
As such, it was encouraging to see Greggs’ share of whole food-to-go visits rise to eight.6%, up from 8.1%. It’s now the primary model for breakfast, quantity two for lunch, and quantity 4 within the dinner market.
In the meantime, supply gross sales have been up 8.1%, making Greggs the quantity 4 within the UK marketplace for supply. I ordered a Greggs to my desk yesterday through Uber. It arrived very quickly (mac and cheese, with southern fried hen goujons, for those who have been questioning).
Wanting into 2026, easing inflationary pressures ought to present some assist to client spending…We’ve got a transparent formulation for long-term success, leveraging our price management, vertical integration, breadth of vary and robust observe document of innovation. Collectively, these strengths give us a transparent aggressive benefit.
CEO Roisin Currie.
5. Capital expenditure has formally peaked
Greggs has been investing closely in two new cutting-edge distribution centres in Derby and Kettering to assist a 3,000+ store property.
From mid-2026, the Derby web site will roll out robotic selecting of frozen items. The Kettering web site, set to open in 2027, will use extra automation for chilled and ambient items.
Capital expenditure peaked at £287.5m final 12 months. In 2026, it is going to be round £200m, earlier than falling to £150-£170m from 2027.
Because of this, free money era will enhance transferring ahead as provide chain capex reduces considerably. And administration says this may create “material capacity for cash returns”.
Due to this fact, the medium-term outlook for particular dividends and share buybacks appears first rate. Pair this with the present 4.3% yield and cheap valuation, and I nonetheless suppose Greggs shares are value contemplating for the long run.
