DAVY VIEW

Q3 trading was ahead of expectations, with store managed like-for-like (LFL) growth of +3.4% (Visible Alpha, H2-26: +2.7%), supported by menu innovation and more settled weather in August and September. Cost inflation expectations remain unchanged at c.2% on a LFL basis in 2026, albeit with signs of greater inflationary pressures in 2027. Management has announced plans to consolidate in-house manufacturing operations, with annual cash savings of c.£20m expected from c.FY28-FY29. Improved trading performance in recent months and continued strong cost control have led Greggs to expect a modestly improved outcome for FY26. At first look, we envisage c.mid-single-digit % upside to our FY26 adjusted profit before tax, while our FY27 estimates will remain unchanged.