Picture supply: Getty Photos
On 2 July, the Greggs (LSE:GRG) share worth crashed 15% as traders took a dislike to the pie and sausage roll maker’s newest buying and selling replace. Since then, it’s been in gradual decline. On the time of writing (1 September), the inventory’s altering palms for 20% lower than at first of July. Its market cap is now half what it was in August 2024.
To evaluate the funding case, I’m going to contemplate how the baker’s performing in opposition to the 4 key drivers of development that it’s recognized for itself.
1. Rising the property
Greggs is definitely not hanging about in terms of opening new retailers. In spite of everything, extra websites equals greater income.
On 2 January 2021, it operated 2,078 shops. By 28 June 2025, this had elevated by 27% to 2,649. The group has plans to develop this to “considerably extra” than 3,000. Nonetheless, a timescale has not been specified.
2. Prolonged buying and selling
With so many shops up and down the nation, I believe one of the best places have already got a Greggs.
Nonetheless, by opening new premises in locations that allow night buying and selling, it’s doable to draw prospects who may not in any other case be capable of get pleasure from its foods and drinks providing.
3. Digital channels
Greggs makes its merchandise obtainable through Simply East and Uber Eats.
Throughout the six months ended 30 June 2025 (H1 25), digital gross sales accounted for six.8% of company-managed store income. This was marginally greater than for a similar interval in 2024 (6.7%).
4. Broadening buyer attraction and driving loyalty
Through the group’s app and thru social media, the baker intends to widen its attraction. And it appears to be doing fairly effectively right here. It’s at present quantity 8 within the Meals and Drink class of Apple’s free app retailer.
So what’s the issue?
However a rising high line — complete gross sales had been up 7% in H1 25 — isn’t translating into improved earnings.
Working revenue was 7.1% decrease and pre-tax earnings fell 14.3% in comparison with H1 24. A few of this was as a result of timing of prices however “difficult” market circumstances and climate disruption had been additionally accountable. Working revenue in 2025 is now anticipated to be “modestly under” that achieved in 2024.
And though like-for-like gross sales elevated 2.6% in the course of the quarter, the speed of development was slower in comparison with the identical quarter in 2024. For Greggs, that’s an issue. Momentum is so necessary in serving to preserve optimistic investor sentiment. When development slows, some will look elsewhere. Additionally, with 100% publicity to the UK, traders could be frightened that it’s notably delicate to a home slowdown.
Nonetheless, one benefit of the falling share worth is that the inventory’s yield has elevated. Based mostly on quantities paid over the previous 12 months, it’s now as much as 4.3%. After all, there aren’t any ensures in terms of payouts.
But when Greggs can decide up its charge of gross sales development as soon as extra then I’m certain its share worth will reply positively. The inventory’s at present buying and selling on 12.7 occasions its anticipated earnings for 2025. That is barely under its three-year common and will suggest that the current sell-off has been overdone.
For my part, the group has a powerful model and a formidable development story. Most significantly, its shops at all times look busy to me. On stability, I believe it’s one to contemplate.
Picture supply: Getty Photos
On 2 July, the Greggs (LSE:GRG) share worth crashed 15% as traders took a dislike to the pie and sausage roll maker’s newest buying and selling replace. Since then, it’s been in gradual decline. On the time of writing (1 September), the inventory’s altering palms for 20% lower than at first of July. Its market cap is now half what it was in August 2024.
To evaluate the funding case, I’m going to contemplate how the baker’s performing in opposition to the 4 key drivers of development that it’s recognized for itself.
1. Rising the property
Greggs is definitely not hanging about in terms of opening new retailers. In spite of everything, extra websites equals greater income.
On 2 January 2021, it operated 2,078 shops. By 28 June 2025, this had elevated by 27% to 2,649. The group has plans to develop this to “considerably extra” than 3,000. Nonetheless, a timescale has not been specified.
2. Prolonged buying and selling
With so many shops up and down the nation, I believe one of the best places have already got a Greggs.
Nonetheless, by opening new premises in locations that allow night buying and selling, it’s doable to draw prospects who may not in any other case be capable of get pleasure from its foods and drinks providing.
3. Digital channels
Greggs makes its merchandise obtainable through Simply East and Uber Eats.
Throughout the six months ended 30 June 2025 (H1 25), digital gross sales accounted for six.8% of company-managed store income. This was marginally greater than for a similar interval in 2024 (6.7%).
4. Broadening buyer attraction and driving loyalty
Through the group’s app and thru social media, the baker intends to widen its attraction. And it appears to be doing fairly effectively right here. It’s at present quantity 8 within the Meals and Drink class of Apple’s free app retailer.
So what’s the issue?
However a rising high line — complete gross sales had been up 7% in H1 25 — isn’t translating into improved earnings.
Working revenue was 7.1% decrease and pre-tax earnings fell 14.3% in comparison with H1 24. A few of this was as a result of timing of prices however “difficult” market circumstances and climate disruption had been additionally accountable. Working revenue in 2025 is now anticipated to be “modestly under” that achieved in 2024.
And though like-for-like gross sales elevated 2.6% in the course of the quarter, the speed of development was slower in comparison with the identical quarter in 2024. For Greggs, that’s an issue. Momentum is so necessary in serving to preserve optimistic investor sentiment. When development slows, some will look elsewhere. Additionally, with 100% publicity to the UK, traders could be frightened that it’s notably delicate to a home slowdown.
Nonetheless, one benefit of the falling share worth is that the inventory’s yield has elevated. Based mostly on quantities paid over the previous 12 months, it’s now as much as 4.3%. After all, there aren’t any ensures in terms of payouts.
But when Greggs can decide up its charge of gross sales development as soon as extra then I’m certain its share worth will reply positively. The inventory’s at present buying and selling on 12.7 occasions its anticipated earnings for 2025. That is barely under its three-year common and will suggest that the current sell-off has been overdone.
For my part, the group has a powerful model and a formidable development story. Most significantly, its shops at all times look busy to me. On stability, I believe it’s one to contemplate.
