- Greggs reported strong first-half earnings, with revenue rising 7.2% and pre-tax profit increasing 19.7% to £76 million as the bakery chain continued to gain market share.
- The company maintained its full-year guidance, despite expecting around £10 million in additional second-half costs related to its new Derby distribution centre.
- Investors will now watch whether stronger July trading can offset higher investment costs, after management said recent sales have exceeded first-half growth as cooler weather boosted customer demand.
Greggs (LSE: GRG) remained in focus on Thursday as investors continued to assess the bakery chain’s strong first-half results and optimistic outlook for the remainder of 2026. The company delivered double-digit profit growth, reaffirmed its full-year guidance and reported stronger trading in July, reinforcing confidence in its ability to navigate a challenging consumer environment.
The update comes as UK retailers continue to face pressure from cautious household spending and changing consumer behaviour. However, Greggs demonstrated resilience by growing sales, expanding its market share and improving operational efficiency.
The company reported a 19.7% increase in pre-tax profit to £76 million for the first six months of the year, while total sales rose 7.2%. Like-for-like sales at company-managed stores increased 2.1%, reflecting continued customer demand despite softer footfall across the wider food-to-go market.
Greggs maintains guidance despite higher second-half costs
Management kept its full-year outlook unchanged, signalling confidence that recent momentum can offset additional investment costs expected later in the year.
The company now expects annual cost inflation to be around 2%, an improvement from earlier forecasts. Together with approximately £7 million in structural cost savings delivered during the first half, the lower inflation environment provides additional support for margins.
However, Greggs warned that around £10 million of additional operating costs associated with its new Derby distribution centre will be recognised during the second half, preventing those savings from translating into higher full-year profit guidance.
July trading offers encouraging start to the second half
One of the biggest takeaways from the earnings update was management’s positive assessment of recent trading.
After reporting 2.1% like-for-like sales growth during the first half, Greggs said trading in July has accelerated and is running ahead of internal expectations as cooler weather encouraged higher customer traffic.
The company noted that extremely hot weather typically reduces demand for hot food products, but improvements made over the past year have helped soften the impact. Expanded chilled food options, a broader iced drinks range and better inventory planning have all strengthened the retailer’s ability to manage seasonal demand fluctuations.
xpansion strategy remains intact
Greggs continues to invest in its long-term growth strategy, although management slightly lowered its store expansion target for 2026.
The retailer now expects to open between 100 and 110 net new shops this year while reducing planned capital expenditure to approximately £180 million.
Alongside traditional bakery outlets, Greggs is continuing to test smaller “Bite Size” locations, self-service concepts and travel hub franchises. The company is also expanding grocery distribution, providing additional opportunities beyond its core high street business.
These initiatives form part of management’s broader strategy to increase convenience and reach more customers through multiple retail formats.
Greggs share price outlook
Greggs enters the second half of 2026 from a position of strength. Strong cash generation, easing cost pressures and improving sales momentum have allowed the company to reaffirm its annual outlook despite absorbing higher distribution costs.
Investors will now focus on whether the stronger July performance can continue through the summer and into the final quarter, while monitoring the pace of new store openings and margin performance as expansion plans progress.
The company benefited from higher sales, improved cost control, structural savings and continued expansion of its store network.
No. Management reaffirmed its full-year expectations despite forecasting around £10 million of additional costs related to its new Derby distribution centre.
Management said July sales were stronger than the first-half trend and ahead of internal expectations, suggesting consumer demand improved as temperatures became milder.