London · Delayed Price · Currency is GBP · Price in GBX Associated British Foods Earnings Call Transcripts
Fiscal Year 2026
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Group H1 profit and EPS declined year-over-year, but performance was in line with expectations and the outlook for most segments is unchanged except for Sugar, which is now expected to post a full-year loss. Primark gained UK market share and advanced digital initiatives, while the demerger process remains on track.
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Primark's Q1 sales grew modestly, with U.K. outperformance offset by weakness in Europe and the U.S. Increased markdowns have pressured margins, and full-year profit guidance has been lowered. Strategic initiatives in digital and product are expected to drive future growth.
Fiscal Year 2025
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Group sales fell 1% and adjusted operating profit dropped 12% due to a sharp decline in Sugar profits, while other segments remained resilient. A structural review may lead to a split between Retail and Food, and a new GBP 250 million buyback is planned for 2026. Growth in adjusted operating profit and EPS is expected next year.
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Second half saw strong UK and Ireland retail performance and market share gains, while continental Europe remained soft. Sugar profitability in Europe is delayed due to oversupply, but Africa is performing well. Hovis acquisition is expected to deliver significant synergies.
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Revenue was flat at £9.5bn, with strong retail and ingredients offset by sugar losses. Adjusted operating profit fell 10%, and a £101m impairment was recognized in Spanish sugar. Strategic reviews and restructuring are underway in underperforming segments.
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European and US operations are performing well, offsetting UK sales volatility post-Budget. Primark's growth is driven by store expansion, digital initiatives, and strong cost control, while grocery and sugar segments remain stable. Margin resilience is supported by geographic diversity and operational efficiency.
Fiscal Year 2024
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Operating profit and EPS saw strong double-digit growth, with robust cash generation and margin recovery across all segments. Continued investment and capital returns underpin a positive outlook, though sugar faces near-term headwinds before a 2026 rebound.
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Strong growth and profitability were delivered, with Primark margins robust and expansion ongoing. Sugar profits will drop sharply next year due to European oversupply but are expected to rebound in 2026. Strategic investments continue across brands, digital, and new markets.