FY25 LFLs marginally lower though PBT to be in-line, FY26 guide softer Greggs provided a year-end trading update this morning in which it reported LFL sales growth of 2.4% for FY25 (GBYe 2.7%, VA consensus at 2.5%) with trading only marginally picking up to +2.9% in Q4 (GBYe +4.1%) despite tracking a much softer prior year comparative (Q4’25 +2.5%, FY24 +5.5%). With pricing up mid-single digits, this implies volumes remain in negative territory reflecting ongoing challenging market conditions and subdued consumer confidence. With 120 net new stores opened in the period, total sales grew 6.8% in the year to £2,151m (+6.8% yoy, GBY £2159m). In terms of PBT for FY25, the board expects an FY25 outcome in-line with its previous expectations (e.g. “could be modestly below that of FY24”, GBYe £176m, VA consensus £174m), aided by £13m of cost efficiencies and before accounting for £4.5m one-off sales tax costs related to FY24. For FY26, the Group expect LFL cost inflation to be lower though consumer confidence is likely to remain a headwind along with the already disclosed incremental costs associated with the new supply chain capacity. As a result, it expects PBT to be similar to 2025 (GBYe and VA consensus estimates are for +c.3.5% PBT growth yoy). Goodbody view Greggs shares were c.-35% vs the start of 2025, however, it has bounced strongly in recent months and is up c.25% vs late November lows. On our current estimates, this leaves it trading on 13.4x cal.26 P/E and 5.9x EV/EBITDA. Overall, while the in-line PBT outcome is reassuring and Greggs seem to be outperforming the wider market, we nonetheless expect a muted share price reaction this morning given the softer Q4 LFL performance and cautious macro-related outlook into FY26. We see mid-single digit downside to our and consensus PBT expectations following today’s update. Key highlights Highlights include: i) Company-managed LFLs for Q4 were +2.9% as subdued consumer confidence continued to impact the food-to-go market. Despite this, Greggs did increase its share of visits, including at both breakfast and evening; ii) the Group opened 207 new shops for the year and closed 86 (121 net-new) giving a total of 2,739 trading at the end of December (inc. 602 franchised units). The Group expects to open 120 net-new shops in 2026; iii) The Group’s new supply chain capacity investments remain on track with testing beginning in Derby which is set to commence a phased roll-out from mid-2026. Kettering is on track to open in 2027; iv) Greggs ended 2025 with a net cash position of £47m (GBYe net bank debt £6m).