Greggs disappointed hedge funds holding short positions in the high street bakery chain as its shares rallied despite lower profits last year and slowing growth in 2026.
CEO Roisin Currie warned of “another tough year for the consumer” ahead as Greggs revealed like-for-like growth of just 1.6% in the first nine weeks of 2026, compared with 2.9% in the fourth quarter of 2025.
Jonathan Pritchard of Peel Hunt noted the persistently wet weather in January and February will not have helped sales.
“The bears will point out this is the second-worst like-for-like showing since Covid, and that McDonald’s (for all that it is not a direct competitor) is doing much better,” he said.
However, the sausage roll purveyor’s boss was optimistic inflationary pressures would ease a little this year, with cost inflation hoped to come down from 5.5% in 2025 to about 3% in this financial period.
Capex spend also peaked at Greggs in 2025 at £287.5m as new national distribution centres in Derby and Kettering are set to come online.
Total revenues in the 52 weeks to 27 December rose 6.8% to £2.2bn as Greggs continued to expand its store estate, to 2,739 shops, with like-for-like growth of 2.4%.
But underlying pre-tax profits fell 9.4% to £171.9m on the back of higher labour, food and packaging costs, while overall profit before tax sank 17.9% to £167.4m.
Currie called the 2025 performance “resilient” as Greggs battled a tough environment for the whole food-to-go market. She said, despite the challenges, there was a “clear opportunity” for significantly more than 3,000 UK shops over the long term, with the new DCs giving the group a logistics capacity for 3,500 outlets.
Shares in Greggs – which is one of the most shorted stocks on the FTSE 350 – climbed by more than 1% on Tuesday when the results were announced and are up about 4% this week.
The share price remains about 3.5% lower so far this year and is down 11% over the past 12 months after being one of the worst-performing in food & drink in 2025.
Kate Calvert of Investec highlighted, amid the challenging market backdrop, that “reassuringly” Greggs continued to take market share in FY25, “showing the attraction of its proposition”.
“Greggs continues to outperform its peers, with its share of visits increasing 0.5% to 8.6% compared to a market down 3.1%.”
Dan Coatsworth, head of markets at AJ Bell, said the conflict in the Middle East could throw a spanner in the works in terms of easing inflationary pressures for Greggs and consumers.
“There is a real threat of a new inflation spike and that could stop shoppers in their tracks,” he added. “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.”
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