Shares of Associated British Foods dropped 8.2% to 1854p following the group’s Q4 trading statement, published Thursday morning. The update showed Primark’s like-for-like sales were expected to fall 3% in the quarter ending September 12, with a pronounced 4.3% decline in continental Europe outweighing a modest 0.4% increase in the UK and Ireland.
Investors reacted negatively to the combination of disappointing near-term trading and a cautious initial outlook for FY2027 after already tempered expectations following a challenging first half of the year. Jefferies was among the analysts to react swiftly, describing the Q4 results as evidence of "a muted end to the year for Primark led by underwhelming Europe sales," and calling the group's guidance "a downbeat outlook for the stock this morning."
Management also provided guidance for Sugar in FY2027, indicating an adjusted operating loss in a range between A370 million and A3170 million. The company attributed the wider loss outlook to higher gas costs and adverse weather conditions in Africa, naming both as key risks to the Sugar business performance.
The broader market environment compounded ABF-specific weakness. The FTSE 100 fell to a seven-week low amid escalating U.S.-Iran tensions that pushed Brent crude above $100 per barrel, a development that weighed on sentiment across London-listed stocks. That macro headwind added to the company-specific selling, leaving ABF trading well below its 52-week high of 2351p and nearer the bottom of its annual trading range.
While the update included some strategic positives - a confirmed Primark home delivery launch and an on-track demerger timeline - those items were not enough to counterbalance the disappointing near-term trading figures and the more bearish Sugar outlook.
Key context and takeaways
- Primark Q4 like-for-like sales expected to be down 3% for the quarter ending September 12, split between a 4.3% decline in continental Europe and a 0.4% rise in the UK and Ireland.
- Management forecast a wider Sugar adjusted operating loss for FY2027 of between A370 million and A3170 million, citing higher gas costs and adverse weather in Africa as principal risks.
- Market pressure from a rising Brent crude price - above $100 per barrel - and geopolitical tensions contributed to a broader slide in London-listed equities, pushing the FTSE 100 to a seven-week low.
The intersection of weaker-than-expected Primark European sales, a more pessimistic Sugar outlook, and an unfavorable macro backdrop created the conditions for the substantial intraday decline in ABF's share price.