Primark owner AB Foods still expects lower annual profit
AB Foods Reports Flat Revenue and Maintains Cautious Outlook
LONDON, July 1 (Reuters) - Primark owner Associated British Foods still expects annual profit to be below the prior year's outcome, it said on Wednesday, as it reported flat third quarter revenue.
Business Segment Performance
Primark Fashion Business
The group, which confirmed in April it plans to spin off the Primark fashion business from its food businesses, said Primark's revenue increased 3% on a constant currency basis in the quarter, while sales in its grocery business, which includes brands such as Ovaltine, Ryvita and Twinings, rose 1%.
Sugar Business
However, revenue in its sugar business fell 4%.
Impact of Middle East Conflict on Sugar Segment
In sugar, AB Foods said the duration and severity of the Middle East conflict has increased gas price expectations for next year, which has impacted its European profit outlook.
Financial Outlook and Analyst Expectations
Aside from sugar, the group's full year outlook is unchanged.
"We continue to expect Group adjusted operating profit and adjusted EPS in 2026 to be below last year," it said.
Prior to the update, analysts were on average forecasting a year to September 2026 adjusted operating profit of £1.55 billion ($2.05 billion), according to LSEG data, down from the £1.73 billion it made in 2024/25.
Corporate Strategy and Share Performance
Demerger Plans
"We remain on track for the demerger to become effective before the end of 2027 calendar year," the group said.
Share Price Movement
Shares in AB Foods have fallen 7% so far this year.
(Reporting by James Davey; editing by Sarah Young)
