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During the last yr, Greggs‘ (LSE:GRG) share worth has crumbled roughly 20%. It plummeted once more final week (8 January) after it stated full-year earnings are unlikely to develop in 2026.
At £16.57 per share, Greggs shares stay greater than November’s multi-year lows of £14.18. However from an historic perspective they nonetheless look dust low-cost.
Certainly, the FTSE 250 firm’s ahead price-to-earnings (P/E) ratio is 12.7 occasions. As an instance how low that is, the 10-year common sits miles above this at 12.7 occasions.
Is that this a high dip-buying alternative for traders? Let’s have a look.
Greggs shares fall… once more
Market confidence in Greggs stays at all-time low, and final week’s replace despatched its shares crashing once more. Like-for-like gross sales development in company-managed outlets dropped to 2.4% final yr, it stated. By comparability, corresponding revenues elevated 5.5% in 2024.
The yr earlier than that, like-for-like development was 13.7%. Progress is halving yearly, resulting in hypothesis we’ve hit ‘Peak Greggs.’
Like different retailers, the baker’s troubles mirror weak client spending that’s impacting wider retail. A murky outlook for the UK financial system recommend consumers will preserve the purse strings firmly tightened.
However that is solely a part of the story. Different main fast-food distributors are additionally quickly increasing, placing additional strain on Greggs’ once-captivating development story.
Indicators of restoration
However are issues as dangerous as Greggs’ share worth collapse suggests? I’m not satisfied.
Issues are clearly powerful, however it stays a heavyweight participant in an extremely aggressive trade. In response to chief government Roisin Currie final week, the retailer “outperformed the broader market and elevated its market share of visits” in 2025.
Helped by these share positive factors, like-for-like gross sales development at Greggs’ managed outlets accelerated to 2.9% in This autumn from the earlier three months. In reality, they had been nearly double the 1.5% recorded in Q3.
So what subsequent?
I’m not anticipating the corporate to stage a shocking gross sales restoration but. Greggs itself has warned it expects “client confidence to stay a market headwind within the yr forward“, which — mixed with prices related to new provide chain capability — means it’s anticipating zero earnings development in 2026.
However I believe Greggs might nonetheless spring a gross sales shock, pulling its share worth greater. Even slight indicators of excellent information might immediate a pickup in shopping for exercise, given how low-cost the corporate’s shares now are.
I definitely stay assured Greggs shares can bounce again as soon as client spending begins to enhance. Plans to open one other 250 outlets over the subsequent few years stay in place, taking the entire to three,000 and making a basis for future development.
Critically, these shall be situated in under-penetrated places and locations with excessive footfall like practice stations and airports. However that’s not all. It’s additionally elevating the variety of franchised shops on its books, that are much more worthwhile than company-managed retailers.
However it’s not all about retailer enlargement. With additional menu refreshments on the playing cards, and its push into digital and night channels rolling on. Night buying and selling is presently Greggs’ fastest-growing a part of the day.
Investing in Greggs shares nonetheless comes with threat. However for traders in search of a high restoration play, I believe the baker’s price severe consideration.
