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Greggs PLC shares rose 4.1% to 1,585p on Tuesday morning after the Tyneside-based bakery chain reported improving sales momentum in recent weeks.
Like-for-like (LFL) sales increased by 2.5% over the first 19 weeks of the year, improving from the 1.6% figure reported after nine weeks. The improvement was driven by an acceleration to 3.3% in the last 10 weeks.
Jefferies said the improvement comes despite a tougher comparison a year earlier.
Jefferies pointed to menu development as a key factor supporting the improved LFL trend, noting the launch of a new chicken roll in April. The broker said it “suspect[s] this has been a key contributor to the improved LFL trend”.
Greggs reiterated guidance including 120 net new stores, cost guidance of 3%, and profit before tax (PBT) guidance.
The company also said it is “monitoring the situation in the Middle East” and sees scope for food inflation in the second half of the year if the conflict continues. Greggs added that it is well-hedged on key requirements, with around five months of food and packaging costs covered and 85% of its 2026 energy and fuel needs fixed at current prices.
Jefferies described the update as “a solid update”, citing improving LFLs, strong profit extraction, and reiterated guidance. However, it added that its analysis suggests price is contributing approximately 6%, with volumes still in negative territory.
Shore Capital said “same-store volumes looking like they are stabilising, which is a relief”.
Analyst Clive Black said Greggs is “in the midst of quite a material infrastructure investment”, which represents an “enormous capital expense”, but noted that commissioning is “in tow”. He reiterated a “hold” rating, adding: “If trade can remain sound as the peak capital expenditure is worked through, much stronger cash flow metrics may be ahead, which could make the stock a lot more interesting in due course, but that is for FY27 and thereafter.”
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