Greggs PLC on Tuesday said rising costs and the warm summer weather dented profit in 2025 amid muted consumer spending.
The Newcastle upon Tyne, England-based bakery chain said pretax profit fell 18% to £167.4 million in the 52 weeks to December 27 from £203.9 million the year prior.
Underlying pretax profit declined 9.4% to £171.9 million from £189.8 million the year prior.
Underlying operating profit margin was 8.7% in 2025, down from 9.7% in 2024.
The lower profitability reflected increased fixed costs in respect of manufacturing, logistics and technology capacity and the operating leverage impact of lower like-for-like volumes, Greggs said.
‘Subdued consumer confidence impacted trading,’ Greggs added.
Total sales grew 6.8% to £2.15 billion from £2.01 billion, with like-for-like sales in company-managed shops up 2.4% on-year.
Greggs said LFL sales in company-managed shops increased by 1.6% year-on-year in the first nine weeks of financial 2026, with total sales increasing 6.3%.
LFL sales growth was ‘limited by challenging market conditions and particularly impacted by prolonged high temperatures experienced in June and July,’ Greggs explained.
Diluted earnings per share slumped 20% to 119.3 pence from 149.6p.
The total dividend was maintained at 69.0p per share.
Greggs said it sees a ‘clear’ opportunity for ‘significantly more’ than 3,000 UK shops over longer term after growing its retail estate to 2,739 shops in 2025, a net increase of 121 stores.
The FTSE 250 listing is targeting around 120 net openings in 2026 with a ‘strong pipeline of attractive opportunities’.
It is also trialling new ’bitesize Greggs’ format to meet ‘incremental customer demand in locations requiring a more compact unit.’
Evening continues to grow, representing 9.4% of company-managed shop sales in 2025, up from 9.0% in 2024.
Greggs forecast capex will drop to around £200 million in 2026 from £287.5 million in 2025, before reducing to a range of £150 million to £170 million from 2027.
The strong operating cash generation will create material capacity for additional cash returns, Greggs said.
A key focus is restoring the company’s return on capital employed to target of around 20%, the firm said. This fell to 16.0% in 2025 from just 20.3% in 2024.
Greggs left full year 2026 guidance unchanged and expects to deliver profits at a similar underlying level to 2025, with any year-on-year improvement contingent on a recovery in the consumer backdrop.
‘Easing inflationary pressures should provide some support to consumer spending and demand for convenient food-on-the-go continues to underpin the market,’ said Chief Executive Roisin Currie.
Shares in Greggs were down 0.8% at 1,558.42 pence each in London on Tuesday morning.
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