Associated British Foods (LSE:ABF) told investors that fourth-quarter adjusted operating profit is expected to be broadly in line with previous expectations, while adjusted earnings per share is expected to come in ahead of forecasts.
Primark, the ABF-owned value fashion retailer, expects full-year sales growth of around 2%, with like-for-like sales down around 2.6%, as new store openings and its franchise model add around 5 percentage points of growth.
Continental Europe remains the weak spot, with fourth-quarter like-for-like sales down around 4.3%, against a broadly flat UK performance where Primark continued gaining market share despite hot weather delaying autumn clothing demand.
The retailer is launching home delivery in Great Britain, backed by a newly acquired automated fulfilment facility in Sheffield, alongside its "Iconic Value" pricing campaign.
"The group delivered resilient trading in the quarter," said chief executive George Weston, adding that trading in continental Europe "remained challenging."
ABF's Sugar business is now expected to post a full-year adjusted operating loss towards the higher end of its £25m to £60m guidance range, hit by onerous contract provisions, higher gas costs and weaker UK beet crop yields following prolonged hot, dry weather.
For 2027, ABF guided sugar losses to widen sharply to between £70m and £170m, reflecting European market surplus and cost pressures, though it noted recent firmer European and global sugar pricing should benefit future years.
Grocery adjusted operating profit for 2026 is expected slightly below prior expectations, as hot weather curbed Twinings tea consumption in the UK and Europe.
The demerger of ABF's Retail business from its Food businesses remains on track for completion in December 2027.
Full-year results are due on 3 November.
News Intelligence what this means for the company
ABF's sugar division is deteriorating faster than expected, with 2027 losses now guided to £70–170m—more than double the current £25–60m range—driven by European market surplus and cost pressures. While group adjusted EPS beats and Primark's home delivery launch offer offsetting positives, the sugar guidance collapse and Grocery's slight miss (hot weather hit Twinings tea demand) signal headwinds across the food portfolio ahead of the planned December 2027 demerger.
The sharp widening of sugar losses materially weakens ABF's near-term earnings trajectory and raises questions about the value of the food businesses being retained post-demerger. The Primark demerger remains on track for December 2027, but investors now face a clearer picture of the food division's profitability challenges independent of retail.
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Content is for informational purposes only, not financial advice.
