The key number that could signal a recovery for the Greggs share price in 2026

It’s been a horrible yr for Greggs‘ (LSE:GRG) share value, however the inventory’s been exhibiting indicators of life just lately. So will it launch a comeback in 2026?

The quantity traders must deal with is like-for-like gross sales development. That’s why the inventory crashed in 2025 and – for my part – what’s going to decide the way it goes within the subsequent 12 months.

Gross sales development

One of many first questions traders taking a look at any enterprise ought to have is what’s going to the long-term gross sales development be? And that’s particularly attention-grabbing within the case of Greggs. 

In its interim outcomes (revealed in July) the corporate introduced income development of seven%. That’s fairly good, however it doesn’t inform the complete story. A part of this has been the results of opening extra retailers. Whereas this isn’t a nasty factor, it could’t do that endlessly and meaning traders shouldn’t count on that form of development indefinitely.

Like-for-like gross sales development adjusts for modifications within the agency’s retailer depend. On that foundation, Greggs managed income development of simply 2.6%, which is barely above the speed of inflation. 

In reality, like-for-like gross sales development has been weak for a while now and that’s a giant motive why the inventory’s crashed. And it fell even additional to 1.5% in company-owned shops in Q3.

The inventory now trades at a price-to-earnings (P/E) ratio of 12 and I believe that’s affordable for a enterprise the place long-term development is more likely to be beneath 3%. However will issues be higher in 2026?

Brief-term challenges?

My sense is that rather a lot comes all the way down to like-for-like gross sales development. The opposite potential concern is margins and value will increase are price maintaining a tally of, however the principle concern is revenues.

Greggs has been making an attempt to offer shareholders causes for optimism. Greater than as soon as within the final yr, the agency has cited uncommon climate circumstances for faltering demand. That’s a motive to be optimistic wanting ahead. The UK may need one other scorching summer time (I hope so for causes that don’t have anything to do with investing) however it isn’t one thing to depend on.

A better Nationwide Minimal Wage may additionally give shoppers more cash to spend. And decrease rates of interest might assist family budgets, although it comes with a threat of inflation.

Greggs has been growing costs, however it nonetheless presents compelling worth for purchasers. And I believe this could permit it to do effectively in a greater macroeconomic atmosphere. Given this, I believe traders may effectively be cautiously optimistic about like-for-like gross sales development in 2026. And if that occurs, the share value might bounce again. 

Outlook

An enchancment in like-for-like gross sales development in 2026 might vindicate the concept that the final yr has simply been a troublesome one for Greggs. And that occurs with even the very best companies.

However, if there isn’t a significant enchancment, this might justify the view that long-term development’s more likely to be weak. That may be a a lot worse end result for traders. 

My guess is that there’s some reality to the concept that the challenges are short-term. However whereas I believe that makes Greggs’ shares engaging, they’re not my high decide heading into 2026.