The fightback against Greggs short sellers continued today after the bakery chain said settled weather and its new steak and Stilton bake fuelled an upgrade to profit guidance.
The FTSE 250-listed shares repeated their performance that followed July’s bullish half-year results by surging back above the 2,000p threshold to revisit levels last seen in summer 2025.
That will have been hard to stomach for some of the large number of investment firms and hedge funds currently betting against the company through short positions.
About 10.2% of shares were out on loan on Friday 25 September, which according to the latest Financial Conduct Authority (FCA) figures is an improvement from 14.56% in mid-July.
As reported by Kepler Trust Intelligence in a piece for ii yesterday, Greggs ranks as the UK’s 15th most shorted stock compared with second position in March.
The shares remain significantly below the 3,000p achieved in autumn 2024, having been squeezed by a combination of inflationary and consumer spending pressures as well as market speculation of “peak Greggs” following a long period of expansion.
Greggs said today it continued to make progress by evolving its product offer and making the brand more convenient through changes in the store estate.
Cost inflation is expected to be about 2% on a like-for-like basis in 2026, although the company is also braced for greater inflationary pressures in 2027.
Greggs delivered 7.7% sales growth in the third quarter, with the like-for-like figure in company-managed shops up by 3.4% compared with a year earlier.
Trading was supported by the successful launch of new products such as the steak and Stilton bake and by more settled weather in August and September. Year-to-date total sales are up 7.4%, with like-for-like sales up 2.6%.
Greggs opened 95 new shops and closed 38 in the year to date, resulting in a total of 2,796 shops. Openings in the most recent quarter included the company’s fifth “bitesize Greggs” at Tesco Southwark and a 50th drive-thru site in Sunderland.
It said improved trading performance in recent months and strong cost control meant it now expected a modestly improved outcome for 2026. This compared with previous guidance for a profit performance broadly in line with 2025’s result.
Broker Peel Hunt lifted its earnings per share estimate for this year and next by 6%, adding that today’s trading update was at the top end of expectations. Its new price target is 1,700p, which is based on an unchanged 13 times forecast 2027 earnings.
Greggs, which also announced plans to consolidate in-house manufacturing operations, has previously said it has scope for 3,500 shops.
The expansion will be supported by new distribution centres in Derby and Kettering, which are expected to result in higher costs in 2027 before contributing to profitable growth thereafter.
In the FTSE All-Share, Liontrust Asset Management jumped by 39.5p to 300p after it announced the addition of £1.9 billion of assets through the proposed acquisition of Hawksmoor Fund Management and Hawksmoor Investment Services.
The deal brings an experienced investment team led by Ben Conway, who will continue to manage the acquired funds and fund mandates as part of Liontrust’s multi-asset team.
John Ions, who has led the active asset management group since 2010, said the acquisition worth up to £10 million enhanced Liontrust’s position among financial advisers.
He added: “Ben Conway and his team have a highly respected business, having built strong relationships with financial advisers and a loyal client base.”
City bank Berenberg increased its target price by 30p to 390p after noting that the deal is expected to be earnings enhancing on completion. It added: “We view this as another sensible, proactive step by management to diversify the business.”
Today’s rise means the shares are in positive territory for the year, although they had been as high as 351p at the start of July. Based on Berenberg’s forecasts, the shares trade with a projected dividend yield of 7.3% for this year and next.
