Associated British Foods PLC's (LSE:ABF) year-end update was a letdown due to the performance of Primark, analysts said, with troubles at its sugar arm pretty well anticipated.
Deutsche Bank analyst Adam Cochrane felt the trading update was "a bit weaker than expected largely due to Primark", with the clothing chain's sales growth of 1% in the second half, with LFLs down 2%.
This was driven by ongoing weakness in Europe, along with EBIT margin down around 80bps despite gross margin gains.
James Grzinic at Jefferies said investors are "likely to be unnerved" by another period of negative Primark like-for-like sales and a lack of guidance on the year ahead.
He noted that ABF reported that total sales will be up around 1% in the second half of its financial year, while the market was expecting growth of around 3.6%, with LFL sales down 2%.
A loss for the AB Sugar division of £40 million from its Vivergo shutdown was expected, as were £200 million of one-offs.
While City and investor expectations had lowered on the run-in, the outturn was "still disappointing for Primark," Cochrane said, reiterating his 'sell' rating on ABF's shares.
"Whilst the other divisions, especially Sugar, are important for earnings momentum and sentiment, we see Primark as the main driver of investor sentiment and valuation.
"We believe a re-rating and PE expansion are unlikely until Primark achieves sustainable positive LFL sales growth."
Analyst Clive Black at Shore Capital, who has a 'buy' on the shares and said there was there was "still much to like", conceded that the update could have been better.
"In a nutshell, FY25 is expected to deliver a slightly weaker outcome than we anticipated, which is likely to lead to a sideways/nudge down
to our forecasts that we'll confirm once we have spoken to management," Black said.
"For shareholders to be rewarded on an ongoing basis, [ABF] needs to deliver sequential earnings progress."
The shares fell over 11% to 1,991p, the lowest since April.