Yesterday (3 March) was a key date for holders of Greggs (LSE:GRG) shares. The FTSE 250 bakery chain reported its 2025 results for the 52 weeks to 27 December.
With the stock down 43% in two years, shareholders certainly needed some good news. Did they get any? Here are five things to note from yesterday’s report.
1. Total sales are still growing
Last year, Greggs’ total sales grew 6.8% to £2.15bn. This was driven by 121 net shop openings and a 2.4% rise in like-for-like (LFL) sales at company-managed shops.
Greggs ended December with 2,739 shops, and is targeting another 120 net openings in 2026. So revenue does continue to grow.
That said, growth is far from spectacular due to pressure on disposable incomes. LFL sales were up just 1.6% in the first nine weeks of 2026.
2. Profits are under pressure
Underlying pre-tax profit slumped 9.4% to £172m last year. This reflected a “tough” market and higher operating costs, including the increase in employers’ National Insurance contributions and rising costs for food and packaging.
Management expects less inflationary pressure this year, with profits coming in at similar levels. Any improvement would be “contingent on a recovery in the consumer backdrop”.
3. The dividend has been maintained
Despite the dip in profits, the board maintained the dividend at 69p per share, reflecting confidence in ongoing cash generation.
With the share price at £16, this translates into a 4.3% dividend yield.
4. Market share gains
The fragile UK economy is presenting challenges for all retailers. However, for those able to navigate this tricky period, there’s a chance to grow market share. In other words, to emerge stronger on the other side.
As such, it was encouraging to see Greggs’ share of total food-to-go visits rise to 8.6%, up from 8.1%. It’s now the number one brand for breakfast, number two for lunch, and number four in the dinner market.
Meanwhile, delivery sales were up 8.1%, making Greggs the number four in the UK market for delivery. I ordered a Greggs to my desk yesterday via Uber. It arrived in no time (mac and cheese, with southern fried chicken goujons, if you were wondering).
Looking into 2026, easing inflationary pressures should provide some support to consumer spending…We have a clear formula for long-term success, leveraging our value leadership, vertical integration, breadth of range and strong track record of innovation. Together, these strengths give us a clear competitive advantage.
CEO Roisin Currie.
5. Capital expenditure has officially peaked
Greggs has been investing heavily in two new cutting-edge distribution centres in Derby and Kettering to support a 3,000+ shop estate.
From mid-2026, the Derby site will roll out robotic picking of frozen goods. The Kettering site, set to open in 2027, will use more automation for chilled and ambient goods.
Capital expenditure peaked at £287.5m last year. In 2026, it will be around £200m, before falling to £150-£170m from 2027.
As a result, free cash generation will increase moving forward as supply chain capex reduces significantly. And management says this will create “material capacity for cash returns”.
Therefore, the medium-term outlook for special dividends and share buybacks looks decent. Pair this with the current 4.3% yield and reasonable valuation, and I still think Greggs shares are worth considering for the long term.
