It was a terrible year Greggs(LSE:GRG) share price, but the company’s stock has been showing signs of recovery lately. So will it return in 2026?

Investors need to focus on sales growth at comparable levels. That’s why the stock market crashed in 2025 and, in my opinion, that will determine what the next 12 months will look like.

Sales enhance

One of the first questions investors should ask when considering any company is what will its long-term sales growth be? This is particularly fascinating in the case of Greggs.

In its half-year results (published in July), the company announced a 7% enhance in revenues. That’s pretty good, but it doesn’t tell the full story. This was partly the result of opening further branches. While this isn’t a bad thing, it can’t continue like this forever, and that means investors shouldn’t expect this kind of growth to continue indefinitely.

Like-for-like sales growth is adjusted for changes in the company’s store count. On this basis, Greggs achieved revenue growth of just 2.6%, just above the rate of inflation.

In fact, comparable sales growth has been delicate for some time, and that’s the main reason for the stock’s decline. And in the third quarter in own stores it dropped even further to 1.5%.

The stock is currently trading at a price-to-earnings (P/E) ratio of 12, which I think is reasonable for a company where long-term growth is likely to be less than 3%. But will things be better in 2026?

Short-term challenges?

I feel like a lot of it comes down to sales growth at a similar level. Another potential issue is margins and cost increases that are worth keeping an eye on, but the main concern is revenue.

Greggs is trying to give shareholders reasons for optimism. Last year, the company cited more than once that weakening demand was due to unusual weather conditions. This is a reason to look to the future with a positive attitude. The UK may be in for another heated summer (hopefully for reasons unrelated to investing), but you can’t count on it.

A higher national minimum wage could also give consumers more money to spend. In turn, lower interest rates could aid household budgets, although this carries the risk of inflation.

Greggs is increasing prices but still offering great value to customers. And I think that should allow it to do well in a better macroeconomic environment. Given this, I think investors can be cautiously hopeful about comparable sales growth in 2026. And if that happens, the share price could recover.

Perspectives

An improvement in comparable sales growth in 2026 may support the idea that last year was simply a complex year for Greggs. And this happens even to the best companies.

On the other hand, if there is no significant improvement, this could justify the view that long-term growth is likely to be delicate. This would be a much worse outcome for investors.

I guess there is some truth to the idea that challenges are ephemeral. But while I think this makes Greggs stock attractive, it’s not my favorite pick for 2026.