Associated British Foods Shares Retreat as Primark Sales Warning Overshadows Profit Upgrade

AB Foods sees Primark Q4 like-for-like sales down 3.0% and raises full-year EPS guidance, while its sugar unit heads toward the top of its loss range.

Associated British Foods delivered a mixed trading update on Thursday that left investors focused squarely on the weak spot: its budget fashion chain Primark. The conglomerate now expects like-for-like sales at the retailer to fall 3.0% in the fourth quarter ending 12 September 2026, a disclosure that sent the stock tumbling in London trading, where it briefly ranked as the worst performer on the FTSE 100.

The shares were quoted at EUR 21.40, down 10% on the day, widening the gap to their 52-week high of EUR 26.80. The decline also pushed the price 11% below its 50-day moving average.

Full-Year Sales Still Growing, Margins Holding Near 10%

Despite the softer comparable-store performance, management continues to guide toward roughly 2% total sales growth at Primark for the full 2026 financial year. New store openings and an expanding franchise model are doing the heavy lifting behind that figure. The chain's adjusted operating margin is projected at about 10% for the year.

In a strategic pivot, the company confirmed plans to launch a home delivery service in the UK — a notable break from its long-standing reluctance to sell directly online. Primark has historically leaned almost entirely on its physical store estate and click-and-collect arrangements to keep costs in check.

Sugar Unit Heads for Top of Loss Range

Away from retail, the update offered a granular look at the group's other pillars. The sugar division is now tracking toward the upper end of its previously guided adjusted operating loss range of GBP 25 million to GBP 60 million for 2026. Grocery also came in softer than planned, with adjusted operating profit there expected slightly below the original forecast. The ingredients business, by contrast, held steady and matched expectations.

Offsetting that pressure, Associated British Foods raised its earnings outlook: adjusted earnings per share for the full year are now seen coming in above prior expectations, even as group adjusted operating profit stays broadly in line with earlier guidance. The split between a softer top line at Primark and a firmer bottom line reflects the group's tight grip on costs.

Demerger on Track, Brussels Clears China Venture

The separation of the retail arm from the food businesses remains on schedule, with completion targeted for December 2027. Both entities are expected to operate independently and respond more nimbly to shifting markets. In a separate development last week, the European Commission granted approval for joint control of Hebei Mauri Food Co. by Associated British Foods and Wilmar International.

Analysts had flagged caution ahead of the release. Citigroup lifted its price target on 3 September to 1,550 pence from 1,330 pence, while keeping a sell rating on the stock.

Investors will get the full picture on 3 November 2026, when the company publishes audited results for the 52 weeks to 12 September. Further detail on the online delivery rollout and the demerger timetable is expected then.