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Greggs plc
GGGSYConsumer DefensiveOTCGB
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Greggs PLC (LSE:GRG) has prompted fresh optimism from analysts after stronger-than-expected sales growth suggested pressure on customer volumes may be easing, with some brokers now pointing to the potential for future share buybacks. The bakery chain reported like-for-like sales growth of 2.5% for the first 19 weeks of 2026, accelerating to 3.3% in the most recent 10 weeks despite tougher comparisons and a still uncertain consumer backdrop.
Greggs PLC (LSE:GRG) shares climbed 4.1% to 1,585p on Tuesday morning, after the Tyneside-headquartered bakery chain reported an improvement in sales in recent weeks. Like-for-like sales came in at 2.5% over the first 19 weeks of the year, an improvement from the 1.6% disclosed after nine weeks, thanks to an acceleration to 3.3% in the last 10 weeks.
Greggs PLC (LSE:GRG) revealed that trading improved in recent weeks, though the bakery group has left its full-year guidance unchanged. Total sales rose 7.5% to £800 million in the first 19 weeks of 2026, while like-for-like sales in company-managed shops increased 2.5%.
Greggs offers an attractive valuation at 12x earnings and a 4.65% dividend yield, with a compelling 10.9% owner earnings yield. Fears of 'peak Greggs' are overblown; robust demand, underpenetration in rural areas, and a reasonable 3,500 store target support further growth. Vertically integrated, Greggs maintains cost leadership and high margins despite a capital-intensive model, with capex set to decline, boosting free cash flow.
Greggs plc remains challenged by weak U.K. consumer sentiment and cost inflation, and now faces the fallout from the conflict in the Middle East. On the plus side, CapEx peaked in 2025 and should decrease by £90 million this year and more in 2027. This will be a tailwind to free cash flow. Despite macro headwinds, Greggs isn't losing market share, and the valuation is attractive with shares trading on a trailing P/E ratio of less than 13.
Greggs PLC (LSE:GRG) is gaining ground on its competitors even as its sales volumes disappoint, according to RBC Capital Market, which sees the current weakness as cyclical rather than structural. The baker's recent trading update showed like-for-like sales growth of just 1.6% at the start of 2026, with pricing of around 4% implying volume declines of 2.5%.
