It’s not often you see Greggs (LSE:GRG) shares tearing higher. Investors have got used to the FTSE 250 share falling in value, even plummeting off a cliff at times.
But Greggs’ share price is biting back. Up 5% yesterday (12 May), the battered baker was the FTSE 250‘s biggest riser in Tuesday business. So what’s happened? And is it a top recovery share to consider?
Rising revenues
Consumer spending remains under pressure as the cost-of-living crisis rolls on. Yet trading at Greggs has remained remarkably resilient so far in 2026, as its trading statement yesterday shows.
Analysts at Charles Stanley note that
Greggs’ latest trading update highlights its resilience, with like-for-like sales growth holding up and even accelerating in the most recent 10-week period.
So what did the baker announce? At headline level, revenues were up 7.5% during the first 19 weeks of 2026, at £800m. Like-for-like sales increased 2.5% in the period, with growth speeding up to 3.3% in the last 10 weeks.
Greggs says “partnerships with franchisees and grocery retailers are progressing well and contributing to the growth in overall sales.” What also benefits the business is its strong brand power and packed menu of UK favourites like sausage rolls, doughnuts and cream buns.
But the business isn’t sitting on its hands, and continued menu refreshments are helping it thrive even as many of its rivals struggle. As Hargreaves Lansdown analysts note: “Continued menu tweaks and improvements have drawn existing customers back, and the addition of new salads and iced coffees to the lunchtime menu is helping the group appeal to a new and younger customer base”.
Cost controls
It’s not just sales news that’s impressed investors (like myself) either. Greggs also says it’s made “encouraging profit progress in the year to date, partly reflecting a weak comparator period but also good operational cost control.”
Costs remain a threat to UK businesses as energy prices spike. But Greggs’ work on this front is paying off handsomely, and it’s ‘locked in’ costs for 85% of its energy needs for this year (as well as 50% for next). As a result, headline cost inflation is still expected to run at roughly 3% in 2026.
So what does all this mean? The firm has kept its full-year guidance unchanged for 2026, with profits tipped to match last year’s levels. Having averted releasing a fresh profit warning, it’s perhaps no surprise that Greggs’ share price has taken off.
Are Greggs shares a buy?
Don’t think that Greggs is out of the woods just yet, though. Consumer spending remains under the cosh, as I said. And as analysts at eToro mentions:
Management’s warning over escalating Middle East tensions highlights how quickly fuel, transport and food prices could rise again
The question is, are Greggs shares now a tasty buy? Risks remain, but the firm’s improving resilience bodes well for the near term. Looking further out, I expect profits to rise sharply as store rollout continues and exposure to the lucrative delivery and evening markets ticks up.
What’s more, today the stock has a forward price-to-earnings (P/E) ratio of 12.5. That’s far below the 10-year average of 22–23. For investors seeking attractive recovery stocks, I think Greggs merits serious attention.
