Greggs: Valuation & Earnings upside underscored by profit & CF inflection ahead of expectations

Research evidence excerpt

Greggs: Valuation & Earnings upside underscored by profit & CF inflection ahead of expectations

Borja Olcese AC Europe Equity Research

(34-91) 516-1511 29 July 2026 C A Z E N O V E

borja.olcese@jpmorgan.com

inflation outlook reduced.The outlook for cost inflation in 2026 has reduced, albeit

some uncertainty remains. We are making great progress in building the supply chain

infrastructure that will support the significant growth opportunities that lie ahead. As

previously guided, the cost headwind from this increased capacity is expected to result

in profits in the second half reducing year-on-year, absent a recovery in the consumer

backdrop. The Board’s expectations for the full-year outcome are unchanged (i.e. PBT

in line with 2025). New store opening target: 120 stores, reiterated (Expect around 100–

110 net new shop openings in 2026, with an additional ten ‘Greggs Express’ convenience

retailing trial). Medium-term shop opening rate expected to be at least 100 net shop

openings per annum, with ‘Greggs Express’ trials potentially providing further

opportunities. Capital expenditure. Capex guidance was reduced to £180mn (vs £200mn

prior) for 2026 - strong operating cash generation expected to create capacity for

additional shareholder returns.ROCE. Greggs targets a ROCE of around 20%.

Figure 4: Greggs FY Outlook

Date of Guidance Comments JPMe

08/01/2026 PBT in 2026 to be in-line with 2025 on an underlying basis 0.5%

08/01/2026 2026: 120 net new shop openings 120

Date of Guidance Comments Actual

01/10/2025 2025: 120 net new shop openings (revised lower) 100

29/07/2025 Operating profit could be modestly below the level achieved in 2024 -4.0%

04/03/2025 2025: 140-150 net new shop openings (weighted 1H)

05/03/2024 2024: 140-160 net new shop openings 145