Sparks - Greggs

In the 13 weeks to 26 September 2026 total sales grew by 7.7% within which like-for-like sales growth in company managed-stores was 3.4%. The latter reflects an improvement from the 2.1% growth reported in H126, when like-for-like growth broadly improved through the period. Management attributes the better sales performance to the continued menu innovation and more settled weather. Management’s expectations for cost inflation of c 2% on a like-for-like basis are unchanged. As a result of the improved trading management now expects a modestly improved outcome for FY26, which compares with the prior guidance of expecting a similar underlying level or profit as FY25 with any improvement contingent on a recovery in the consumer backdrop. Looking into Fy27, it is no surprise given the current conflicts that management highlights there are signs of greater inflationary pressures.

In addition to the trading update, management has announced a big strategic development with the proposed consolidation of its manufacturing operations that could lead to the closure of four sites. The proposals are subject to consultation with cash costs of c £60m, which includes capex of c £40m, that is expected to generate annual cost savings of c £20m.