TLDR
- Primark like-for-like sales expected to fall 3% in Q4, with continental Europe down 4.3%
- ABF stock fell over 9% in early London trading on Thursday
- Sugar adjusted operating loss for 2027 guided at £70 million to £170 million
- Full-year adjusted EPS now expected to come in ahead of expectations
- Primark home delivery in Great Britain confirmed, with a demerger of Retail from Food on track for December 2027
Associated British Foods stock dropped more than 9% in early London trading on Thursday after a Q4 trading update showed Primark like-for-like sales are expected to fall 3% in the quarter ending September 12.
The stock was trading at around 1,854p, well below its 52-week high of 2,351p.
Associated British Foods plc, ASBFY
The weakness was concentrated in continental Europe, where LFL sales fell 4.3%. The UK and Ireland managed a modest 0.4% gain, but it wasn’t enough to offset the broader pressure.
Jefferies analysts didn’t hold back, describing the results as “a muted end to the year for Primark led by underwhelming Europe sales” and calling the group’s guidance “a downbeat outlook for the stock this morning.”
Despite the LFL decline, Primark’s total sales are still expected to grow around 2% for the full year. New store openings and the franchise model contributed roughly 5% to growth. The adjusted operating margin at Primark is still expected to land at approximately 10%.
The U.S. business was a bright spot. Sales rose around 11% in the quarter as Primark expanded to 47 stores across the country. Franchise operations in the Gulf also performed strongly, with expansion planned into Saudi Arabia and Mexico.
Food Business Adds to the Pressure
Within the Food division, Grocery adjusted operating profit is expected to come in slightly below previous guidance. Weaker demand for Twinings tea, linked to an extended stretch of hot weather, was cited as the main drag.
Sugar is now guided toward the higher end of its £25 million to £60 million adjusted operating loss range for 2026, reflecting higher gas costs and low European sugar prices. Ingredients profit is expected to be in line with prior expectations.
Looking further ahead, ABF gave a cautious initial view for 2027. The Sugar adjusted operating loss is guided at £70 million to £170 million, a much wider range, citing risks including higher gas costs and weather impacts in Africa.
Grocery profit is expected to be slightly ahead of 2026, despite a one-off hit from consolidating recently acquired Hovis. Agriculture profit is expected to improve year on year.
Market Backdrop
ABF’s stock wasn’t the only thing under pressure Thursday. The FTSE 100 fell to a seven-week low as escalating U.S.-Iran tensions pushed Brent crude above $100 per barrel, adding a macro headwind to ABF’s company-specific selling.
Full-year adjusted EPS is now expected to come in ahead of previous guidance, which offered a small offset to the downbeat tone.
The company confirmed it will launch Primark home delivery in Great Britain, backed by a newly acquired automated fulfilment facility in Sheffield.
The planned demerger of the Retail business from the Food division remains on track for completion in December 2027.
Full-year results are scheduled for November 3.
Stop guessing and start investing with confidence. KnockoutStocks gives you the AI insights, market intelligence, and stock research you need to spot opportunities, cut through the noise, and make smarter investment decisions — all in one powerful platform.
Sign up today and get 50% OFF full access to our premium stock picks.
Simply use coupon code SPECIAL50 at checkout to claim your exclusive discount.
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
