Greggs (LSE: GRG) shares have delivered a remarkable run this week, surging roughly 23.4% since Monday morning on the back of strong interim results.
A £5,000 investment made at the start of the workweek would already be worth approximately £6,175, excluding stamp duty and trading commissions.
The FTSE 250 stock skyrocketed 16.1% on 29 July alone, making it one of the standout single-day moves the bakery chain has seen in recent memory.
The catalyst was the company’s interim results covering the 26 weeks ended 27 June, which revealed sales up 7.2% to £1.1bn alongside 2.1% like-for-like sales growth in company-managed shops.
Operating profit jumped an impressive 22.9% to £86.5m, signalling that the business continues to generate strong returns despite a challenging consumer environment.
Growth was primarily driven by opening new shops, with 34 net openings completed in the first half of the year, while management also flagged good business-to-business growth through Iceland and Tesco frozen product sales.
The Chicken Roll launched in April has been described as “a standout success” by Greggs, and new matcha drinks are also proving popular with customers across its estate.
Greggs is also adapting to challenges associated with GLP-1 drugs by introducing more protein-based and healthier options, including chicken and prawn pasta salads added to its lunchtime offerings.
On costs, around £11m of structural savings are expected in 2026, with cost inflation now anticipated to stay at around 2% for the full year, giving investors added confidence in margin stability.
For 2026, Greggs has trimmed its new store target to 100 to 110 openings, down from its original guidance of 120, though it plans to eventually reach 3,500 locations from 2,773 today.
A smaller self-service format called “Greggs Express” is currently being trialled, and if it catches on, annual opening numbers could exceed those medium-term targets.
Greggs has also made an international move, opening a shop at Tenerife South Airport, which sees around 3 million British travellers pass through every year.
CEO Roisin Currie said the first few weeks of trading in Tenerife have been “very encouraging”, pointing to potential for further international expansion at airports frequented by British holidaymakers.
Given that Greggs is one of the UK’s most heavily shorted stocks, the scale of this week’s jump likely reflects short sellers buying to cover their positions, which could push shares higher still.
Management has also indicated plans to “increase returns to shareholders” as the business enters a more cash-generative phase through 2028, with the stock currently offering a 3.5% dividend yield.
