Greggs cautious on outlook as FY profits drop

(Sharecast News) - Greggs reported a drop in full-year profit on Tuesday as it struck a cautious note on the outlook. In the year to 27 December 2025, total sales rose 6.8% to £2.2bn, with like-for-like sales in company-managed shops up 2.4% on the year.

However, underlying operating profit declined 4% to £187.5m and underlying pre-tax profit was 9.4% lower at £171.9m. Greggs pinned the blame on volume pressure and increased fixed costs related to manufacturing, logistics and technology capacity.

Greggs also said it was seeing some emerging shifts in dietary preferences, with certain consumers seeking greater choice in areas such as increased protein, more fibre and smaller portions.

As far as current trading is concerned, LFL sales in company-managed shops rose 1.6% year-on-year in the first nine weeks of 2026, with total sales up 6.3%.

The bakery chain reiterated its full-year guidance for profits at a similar underlying level to 2025, with any year-on-year improvement contingent on a recovery in the consumer backdrop.

Chief executive Roisin Currie said the company had delivered a "resilient" performance, growing market share, alongside continued strategic progress.

Looking to the year ahead and Greggs said it expects market conditions to "remain challenging" for the consumer.

"We continue to stay focused on value and are significantly ahead of our competitors on this metric," it said.

"Greggs value proposition makes it relatively resilient in the face of cyclical pressure on consumers, and we will continue to focus on this through strong cost control and structural efficiency opportunities.

"At the same time we are successfully increasing access to Greggs through the extension of our own shop estate alongside partnerships with grocery, franchise and delivery partners."

At 0945 GMT, the shares were down 0.8% at 1,558.42p.

Dan Coatsworth, head of markets at AJ Bell, said: "Greggs' profit has deflated like an undercooked cake. The new financial year has also got off to a slow start, leaving investors wondering if the once-loved food seller has gone off the boil.

"The company is optimistic that easing inflationary pressures will translate into greater consumer spending and that the public will choose to buy more of its sweet and savoury goods. The spanner in the works is what's happening in the Middle East and how that has caused energy prices to soar.

"There is a real threat of a new inflation spike and that could stop shoppers in their tracks. If it costs more to fill up the car with fuel and to heat the home, cutting back on sausage rolls and donuts to save money is an easy decision to make.

"Greggs continues to spruce up its menu but there is a nagging feeling its proposition is becoming stale. Consumer tastes constantly evolve and competition is plentiful. Eating habits are also changing amid greater interest in living a healthier and fitter lifestyle, as well as rapid take-up of weight-loss drugs which curbs people's appetites. Greggs might expect to keep ticking along, but the big unknown is the pace of future growth.

"Greggs' store rollout plan suggests it expects the nation to be feasting on its goods all day long, but the past few years' worth of trading and financial figures suggest that's no longer a given."