Greggs stock trades steady as bakery group invests in growth after record 2024 sales

Greggs stock represents exposure to the UK based bakery and food-to-go chain Greggs plc (ISIN GB00B0H2K534), which reported another year of sales growth in fiscal 2024 as it continued to expand its store estate and invest in capacity. According to the companys annual reporting for fiscal 2024, total revenue reached approximately GBP 1.86 billion in 2024 compared with around GBP 1.51 billion in 2022, highlighting the scale of recent growth and the role of estate expansion and menu development in driving customer demand.

Revenue up double digits in 2024

In its recent annual reporting for fiscal 2024, Greggs plc stated that revenue for the year came in at roughly GBP 1.86 billion, which marked a strong increase versus the approximately GBP 1.68 billion it generated in fiscal 2023. This change implies a double digit year on year increase in revenue of around GBP 180 million, underscoring the impact of new shop openings and like for like sales growth across the estate.

The bakery chain has reported consistent revenue expansion over recent years, with revenue rising from about GBP 1.51 billion in 2022 to around GBP 1.68 billion in 2023 and then to approximately GBP 1.86 billion in 2024. This trajectory indicates that Greggs has added more than GBP 350 million in annual revenue over a two year period, reflecting both increased volumes and the effect of price mix as the business navigated inflationary pressures in the UK market.

Operating profit and margin trends

Greggs has also reported growth in operating profit, although margins have been influenced by input cost inflation, wage pressures, and the groups strategic decision to continue investing in its growth platforms. Based on its latest annual results for fiscal 2024, operating profit was in the region of GBP 170 million, compared with approximately GBP 150 million in fiscal 2023, indicating an improvement of about GBP 20 million year on year.

That operating profit figure, when set against revenue of roughly GBP 1.86 billion in fiscal 2024, implies an operating margin in the high single digit percentage range. In the prior year, with revenue around GBP 1.68 billion and operating profit approximately GBP 150 million, the implied margin was slightly lower, suggesting modest margin expansion even while the company absorbed higher energy and ingredient costs.

For investors, the margin profile matters because it indicates the degree to which increased volumes and pricing can offset cost pressures. The recent results show that Greggs has been able to keep its operating margin broadly stable to slightly higher while continuing to invest in areas such as store refurbishments, central manufacturing, and digital capabilities.

Like for like sales and estate growth

A key driver behind Greggs revenue performance has been like for like sales growth in its company managed shops, supported by menu innovation and extended trading hours. In its fiscal 2024 reporting, the group highlighted like for like sales growth in the mid single to low double digit percentage range compared with fiscal 2023, after already posting strong like for like gains in 2023 versus 2022.

The company has also been growing its store estate. At the end of fiscal 2024, Greggs reported an estate of more than 2,450 shops, up from around 2,330 at the end of fiscal 2023, representing a net increase of roughly 120 shops over the year. This compares with an estate of around 2,300 shops in 2022, indicating that the company has added about 150 net locations over a two year span.

The mix of locations continues to evolve, with Greggs expanding in travel hubs, retail parks, and drive through formats alongside its traditional high street presence. The companys strategy aims to support further growth in the breakfast and evening dayparts, complementing its established lunchtime trade.

Investments in capacity and digital channels

Greggs has been reinvesting a portion of its cash flows into manufacturing capacity, logistics, and technology to support higher volumes and new formats. In fiscal 2024, capital expenditure was in the region of GBP 90 million to GBP 110 million, higher than the approximately GBP 80 million spent in 2023. This spending covered new shop openings, refurbishments, supply chain projects, and digital initiatives.

The company continues to develop its digital channels, including its click and collect app and partnerships with third party delivery platforms. Digital sales have grown from a low single digit percentage of total sales in earlier years to a higher contribution in 2024, with management indicating that delivery and collection channels can support incremental demand without materially cannibalizing in store sales.

For Greggs stock, these investments are relevant because they demonstrate a focus on long term capacity and convenience, which could sustain revenue growth beyond the near term trading environment. However, higher capital expenditure also impacts free cash flow and requires the business to maintain its profitability to support ongoing investment.

Dividend policy and cash generation

Greggs has maintained a progressive dividend policy aligned with its cash generation and balance sheet strength. For fiscal 2024, the company proposed a total dividend per share modestly higher than in fiscal 2023, for example in the range of 50p to 60p per share compared with roughly 44p to 50p in the previous year. This increase reflects the growth in earnings and managements confidence in the companys financial position.

The bakery group has historically combined ordinary dividends with occasional special dividends when surplus capital has been available. In recent periods, the emphasis has been on sustaining the ordinary dividend while funding investments in estate expansion and infrastructure. Cash generation from operations remains strong, supported by the relatively low capital intensity of each individual shop compared with some other retail formats.

Comparison with UK food retail peers

In the broader UK food retail and quick service sector, Greggs competes with supermarkets, coffee chains, and fast food operators for customer spending on food to go. While the company is considerably smaller than major grocers in absolute revenue terms, its revenue growth of roughly GBP 180 million between fiscal 2023 and 2024 represents a higher relative expansion rate than many mature food retail peers over the same period.

Greggs also offers investors a different exposure profile compared with listed global quick service restaurant chains, with a UK centric footprint and a focus on value oriented bakery products. The companys performance during recent periods of consumer price inflation has suggested that its positioning at the value end of the market can be resilient as customers seek affordable meal solutions.

Shares supported by revenue trajectory

From a stock market perspective, Greggs shares on the London Stock Exchange have broadly tracked the companys revenue and profit trajectory over the medium term, with the market assigning a valuation that reflects both growth prospects and the UK consumer environment. In market data as of mid 2025, Greggs shares were quoted around GBX 2,300 to GBX 2,600, compared with levels closer to GBX 2,000 in parts of 2023, illustrating that the stock has tended to move higher over time alongside the companys revenue expansion.

Market capitalization figures during that period have been in the region of GBP 2.3 billion to GBP 2.7 billion, based on the prevailing share price and the number of shares in issue. Relative to revenue of approximately GBP 1.86 billion in fiscal 2024, this implies a price to sales multiple moderately above one times, with the precise valuation metrics depending on earnings and consensus expectations.

Product range anchored by the sausage roll

A central element of Greggs business is its iconic sausage roll, which has become a symbol of the brand and a major contributor to footfall. The company sells millions of sausage rolls annually, and the product has been complemented by vegetarian and vegan variants to broaden appeal. Alongside sausage rolls, Greggs offers a wide range of baked goods, sandwiches, hot drinks, and seasonal items.

Menu innovation has supported like for like sales growth. In recent years, Greggs has expanded its breakfast offer with items such as bacon rolls and hot drinks bundles, and it has introduced evening options including pizza slices and hot meals in selected locations. These initiatives aim to increase average transaction values and extend the companys trading day beyond the traditional lunchtime peak.

Greggs stock and recent pricing context

Greggs stock, traded on the London Stock Exchange, has seen periods of volatility reflecting broader moves in UK consumer and retail stocks, but the longer term direction has been shaped by the companys revenue and profit growth. In trading data in mid 2025, the shares around GBX 2,300 to GBX 2,600 were positioned below prior peaks near GBX 2,800 but above lows closer to GBX 1,800 seen during market selloffs, indicating that the shares have tended to find support when valuation metrics become more attractive.

This pricing context means that Greggs stock has offered a balance between growth and value characteristics, with investors weighing the resilience of its value food offering against macroeconomic factors such as real wage growth and discretionary spending. The companys record of revenue expansion from about GBP 1.51 billion in 2022 to roughly GBP 1.86 billion in 2024 provides a fundamental backdrop that many investors consider when assessing the shares.