Associated British Foods profits fall as Primark cuts prices and sugar losses widen

Results for the year to 12 September

Associated British Foods (ABF), the parent company of Primark, which trades as Penneys in Ireland, reported annual results for the year ended 12 September 2026. Group revenue was £19.58bn, up 1% from £19.46bn a year earlier according to the Irish Independent, while RTE reported a 1% fall on a constant currency basis. Pre-tax profit fell 10% to £1.28bn (€1.53bn) according to the Irish Independent, but the Evening Standard put adjusted pre-tax profit down 14% at £1.46bn. RTE reported adjusted operating profit of £1.508bn, a 14% fall, while the Irish Independent put adjusted operating profit at £1.51bn, down 13%.

ABF chief executive George Weston described the year in the following terms.

“Our results this year reflect a challenging operating environment and macroeconomic headwinds.”

Primark: prices, stores and sales

Primark's sales rose 4% to £9.8bn according to TheJournal and the Evening Standard, or 2% excluding currency movements according to the Irish Independent. Like-for-like sales, which strip out new stores, fell 2.6%, and the decline was steeper in continental Europe at 4.7%. TheJournal reported that sales fell in France and Italy and that Germany remained difficult, while US sales grew 13% on new openings even though tariffs weighed on consumer confidence. Primark opened 33 new stores in the year, 14 of them in the US, and traded from 508 stores across 19 markets by September, including four franchise shops. Adjusted operating profit fell 11% to just over £1bn according to TheJournal, while the Irish Examiner and Irish Independent put the decline at 12%. The retailer had cut prices on hundreds of products in July and said the initial response had been encouraging.

Primark group-2.6%

Continental Europe-4.7%

Primark group

-2.6 %

Continental Europe

-4.7 %

Data from the article text

Food businesses and sugar

The grocery division, which includes Twinings, Ovaltine and Ryvita, recorded a 2% rise in sales according to the Irish Independent, or 3% to £4.2bn according to the Evening Standard, while adjusted operating profit fell 11% to £427m. The Evening Standard reported that Twinings was held back by lower sales in the UK and France, which it linked to the long hot summer and its effect on tea demand. The sugar division posted an adjusted operating loss of £47m, which the group attributed largely to lower average selling prices in Europe. The Irish Examiner reported that sugar losses are expected to deepen to between £70 million and £170 million in 2026/27. The ingredients business saw sales rise 2% but profits fall 8%. ABF invested £1.43bn across its businesses, up 15%, completed £253m of share buybacks and kept its total annual dividend at 63p per share.

Outlook and demerger

ABF told investors what it expects for the coming year.

“In 2027, the group is expected to deliver adjusted operating profit and adjusted EPS below 2026, mainly due to Sugar, as previously guided.”

The Irish Examiner reported that Primark's adjusted operating margin is expected to be about 10% in 2026/27, against 10.2% a year earlier, and that space growth in Europe, the US and franchise markets should add around 4% to sales growth. Grocery profit is expected to be broadly in line with 2025/26. The group confirmed in April that Primark would be demerged from its food businesses, with completion expected in December 2027. ABF shares are down 15% over the last year.