Greggs profits rise 20% as expansion and cost control lift first-half results

Greggs has delivered a stronger first half, combining continued sales growth with tighter cost control and a growing shop estate.

For the 26 weeks ended 27 June 2026, total sales increased by 7.2% to £1,101.5 million. Operating profit rose by 22.9% to £86.5 million, while pre-tax profit climbed by 19.7% to £76.0 million.

That is a solid profit recovery after a challenging 2025. However, the result comes with an important caveat: Greggs expects higher operating costs from its new supply chain capacity to weigh on second-half profits.

The Board's expectations for the full year remain unchanged.

Greggs interim results at a glance

Key figure	H1 2026	H1 2025	Change
Total sales	£1,101.5 million	£1,027.7 million	7.2%
Operating profit	£86.5 million	£70.4 million	22.9%
Pre-tax profit	£76.0 million	£63.5 million	19.7%
Diluted earnings per share	54.9p	45.3p	21.2%
Interim dividend per share	19.0p	19.0p	Unchanged
Company-managed like-for-like sales growth	2.1%	2.6%	Lower
Net cash	£15.9 million	Net debt of £12.8 million	Improved

Like-for-like sales compare established shops with the equivalent period a year earlier, excluding sites affected by openings, relocations or closures.

Investors can read the original company announcement for the complete financial statements and notes.

Profit growth outpaced sales growth

The headline feature is the speed of profit growth relative to sales. Revenue rose by 7.2%, but operating profit increased by 22.9%.

Management attributed this to several factors, including a relatively soft comparison period, growth in the grocery business, strong cost control and the timing of cost inflation.

Overall cost inflation was 2.2% in the first half. Greggs now expects cost inflation for the full year to be around the same level, which is lower than previously anticipated.

The company is targeting approximately £11 million of structural cost savings during 2026. It had already delivered £7 million by the halfway point.

That progress matters because Greggs competes heavily on value. Controlling operating costs helps the company protect its customer proposition without relying entirely on price increases.

Sales growth was broad, but established shops remain subdued

Company-managed like-for-like sales grew by 2.1%, while franchise shop like-for-like system sales increased by 1.3%.

Those figures are positive, but not spectacular. Greggs generated the rest of its sales growth through new shop openings, estate expansion and further development of its business-to-business channels, including grocery retailing.

The wider food-to-go market remained difficult. Market visits declined by 1.9% over the 12 months to June 2026, but Greggs increased its share of visits by 0.3 percentage points to 8.7%.

This suggests that the company's value-led offer continues to attract customers even when overall demand is under pressure.

Menu innovation also supported trading. New products included Iced Matcha Lattes, an enhanced salad range and the Chicken Roll, which management described as a standout success.

New shops remain central to the growth plan

Greggs opened 65 shops during the half, including relocations, and closed 31. This produced 34 net openings and took the total estate to 2,773 shops at 27 June 2026, including 627 franchised locations.

The company expects between 100 and 110 net openings across 2026. Over the medium term, it is targeting at least 100 net new shops per year and continues to see an opportunity for at least 3,500 UK shops.

New formats could expand the range of suitable locations. Four smaller "bitesize Greggs" shops have opened so far, with another four expected during the second half. Greggs is also trialling a self-service "Greggs Express" format, with around ten installations expected to be tested in franchised locations during 2026.

The company also opened its first international travel hub shop at Tenerife South Airport. This is being operated with franchise partner Lagardère Travel Retail, and the first few weeks of trading were described as encouraging.

For further company-focused coverage, readers can visit the Greggs PLC share page.

Digital, delivery and grocery channels are adding reach

The Greggs App was scanned in 31.0% of company-managed transactions, up from 25.7% in the comparable period. Management said customers using the App continue to visit more frequently.

Delivery represented 6.9% of first-half sales, compared with 6.8% a year earlier. Three-quarters of company-managed shops now accept orders through Just Eat and Uber Eats.

Delivery order values tend to be around three times those of walk-in purchases, although the RNS did not disclose the relative profitability of delivery orders.

Grocery retailing also grew strongly following the launch of the Greggs Bake-at-Home range in Tesco and the continued expansion of its Iceland partnership.

These channels allow Greggs to reach customers without relying solely on traditional high-street shops.

Capital spending is falling from its peak

Capital expenditure fell to £77.8 million from £172.1 million in the first half of 2025. Greggs has also reduced its expected 2026 capital expenditure from £200 million to around £180 million.

The Derby distribution centre is expected to become fully operational by the end of 2026, while the Kettering site is planned to open in 2027. Together, these sites are intended to support a network of 3,500 shops.

The period-end net cash position was £15.9 million, with total available liquidity of £115.9 million. The company's £100 million revolving credit facility has been extended to June 2029.

Management expects the business to become more cash generative as major supply chain projects are completed. It also said stronger operating cash generation should create capacity for additional shareholder returns, although the timing and size of any such returns were not disclosed.

Dividend held while investment continues

The interim dividend remains unchanged at 19.0p per share. It will be paid on 9 October 2026 to shareholders on the register at the close of business on 11 September 2026.

A flat dividend may disappoint investors hoping that stronger first-half earnings would immediately translate into a higher payout. However, Greggs intends to maintain the ordinary dividend until it is covered two times by underlying earnings.

The key positives and risks for investors

The positives are clear: Greggs is gaining market share, new shops are trading strongly, profit growth is outpacing sales growth and capital expenditure is moving down from its peak.

The company also has several routes to expansion, including traditional shops, smaller formats, franchise partnerships, delivery and grocery retailing.

The main concern is that underlying like-for-like growth remains modest. Cost savings and favourable inflation timing helped first-half profitability, but management expects these benefits to provide less support in the second half.

Greggs has warned that the cost of bringing additional supply chain capacity online is expected to result in second-half profits falling year-on-year, unless the consumer environment improves.

Restoring return on capital employed to around 20% also remains a key objective, indicating that management recognises the need to convert its investment programme into stronger returns.

What matters for the rest of 2026

Greggs has produced an encouraging first-half recovery without changing its full-year expectations.

The next test is whether it can maintain sales momentum as new operating costs arrive. Investors will want to see continued market share gains, disciplined shop openings and evidence that Derby and Kettering can support growth without placing prolonged pressure on profitability.

The long-term expansion plan remains intact. For the near term, though, the balance between modest like-for-like sales growth and higher second-half costs will determine how convincing this recovery proves to be.