Associated British Foods (ABF), the owner of Primark, expects adjusted operating profit to decline in 2027 as sugar losses deepen, compounding pressure from weaker sales at the retailer’s existing stores.
ABF reported a 14% drop in adjusted profit before tax to £1.46 billion for the year ended Sept. 12. Primark’s revenue increased 4% to £9.82 billion at actual exchange rates, helped by new stores, while like-for-like sales fell 2.6%. Its adjusted operating profit declined 11% to £1.01 billion, also at actual exchange rates.
The sales gap was sharp in continental Europe, where Primark’s like-for-like sales fell 4.7%. Comparable sales rose 0.5% in the U.K., and ABF said Primark gained market share there. The company said its efforts to lower prices and reach customers are further along in the U.K. than in continental Europe.
Across Primark, weaker sales at existing stores, markdowns and investment weighed on adjusted operating profit. ABF Chief Executive George Weston said uncertainty about shoppers’ spending and commodity costs remains a concern. The company also cited inflation and higher energy costs in its outlook.
The sugar division posted a £47 million adjusted operating loss in 2026, compared with a £1 million adjusted operating loss a year earlier. ABF forecasts a wider adjusted operating loss of £70 million to £170 million in 2027. On an unadjusted basis, the division’s 2026 operating loss was £146 million.
ABF linked the 2026 adjusted loss to low sugar prices in Europe. It expects the European market to remain in surplus in the short term because inventory from 2025 is still available. Gas costs, production in Africa and currency movements could affect the division’s 2027 result, the company said.
Elsewhere in the group, grocery sales rose 3% to £4.2 billion. ABF said Twinings grew internationally, although a hot summer reduced tea demand in the U.K. and France.
ABF plans investor events from April through July 2027 as it prepares to separate Primark from its food businesses. It aims to complete the split in December 2027.
