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 worth, however the inventory’s been exhibiting indicators of life not too long ago. So will it launch a comeback in 2026?

The quantity traders must deal with is like-for-like gross sales progress. 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 progress

One of many first questions traders any enterprise ought to have is what’s going to the long-term gross sales progress be? And that’s particularly fascinating within the case of Greggs. 

In its interim outcomes (printed in July) the corporate introduced income progress of seven%. That’s fairly good, but it surely doesn’t inform the total story. A part of this has been the results of opening extra shops. Whereas this isn’t a nasty factor, it could possibly’t do that endlessly and meaning traders shouldn’t anticipate that form of progress indefinitely.

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

Actually, like-for-like gross sales progress has been weak for a while now and that’s a giant cause 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 cheap for a enterprise the place long-term progress is prone to be under 3%. However will issues be higher in 2026?

Quick-term challenges?

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

Greggs has been attempting 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 cause to be optimistic trying ahead. The UK might need one other scorching summer time (I hope so for causes that don’t have anything to do with investing) but it surely isn’t one thing to rely on.

A better Nationwide Minimal Wage may additionally give shoppers extra money to spend. And decrease rates of interest may assist family budgets, although it comes with a danger of inflation.

Greggs has been growing costs, but it surely nonetheless presents compelling worth for patrons. And I believe this could enable it to do properly in a greater macroeconomic setting. Given this, I believe traders would possibly properly be cautiously optimistic about like-for-like gross sales progress in 2026. And if that occurs, the share worth may bounce again. 

Outlook

An enchancment in like-for-like gross sales progress in 2026 may vindicate the concept the final yr has simply been a troublesome one for Greggs. And that occurs with even the most effective companies.

Alternatively, if there isn’t a significant enchancment, this might justify the view that long-term progress’s prone to be weak. That will be a a lot worse end result for traders. 

My guess is that there’s some reality to the concept the challenges are momentary. However whereas I believe that makes Greggs’ shares enticing, they’re not my prime decide heading into 2026.