Inghams Group Limited (ASX: ING) has reaffirmed full-year FY26 guidance despite short-term operational cost pressures in Australia, reporting broadly supportive market conditions over the first 18 weeks of the year.
Inghams shares fell 2.5% to A$2.36 in post-noon trade, with analysts citing near-term earnings pressure from rising costs.
The company maintained its FY26 Underlying EBITDA pre AASB 16 outlook at $215–230 million, and guided ~$80 million for 1H26, reflecting near-term cost headwinds before benefits from corrective actions and restructuring flow through in 2H.
CEO and managing director Ed Alexander said demand and volume were stable with materially improved wholesale pricing tracking in line or ahead of the FY26 outlook provided in August. “We have experienced higher than expected operational costs in Australia across farming and processing operations… These factors will weigh on first half earnings, however we are taking decisive corrective actions, and the early results are encouraging,” he said, adding the changes position the business for a “significantly improved” second half and sustainable growth.
Restructure and savings
Following a review, Inghams has implemented a streamlined structure in early 2Q26, creating three divisions:
- Primary Processing & Ingredients;
- Agribusiness & Operations Enablement; and
- Value Add & Turkey.
The overhaul removes layers, clarifies accountability and is expected to deliver $8–10 million in annualised savings within the broader operational efficiency program. The company remains on track for $60–80 million in annualised savings across labour, procurement and site operations (inclusive of restructure benefits).
Trading and pricing
Core poultry volume fell 1.1% year on year but is now steady versus the FY25 exit run-rate (Group +0.8%, AU +0.8%, NZ +0.7%). Non-Woolworths retail in Australia rose 16.5% and QSR grew 8.6% on PCP. Group NSP/kg increased 0.9% year on year and 1.5% versus the FY25 exit rate. Australian wholesale margins were up ~39% on FY25.
Cost environment and corrective actions
Feed cost benefits are broadly in line with expectations: wheat prices slightly better than anticipated; soymeal has firmed modestly above expectations.
Short-term headwinds impacting 1H26 include:
- Farming performance: higher egg costs from reduced volumes and below-target feed conversion. Actions underway with performance expected to be back on target in 2H26.
- Processing: temporary inefficiencies from FY25 customer-mix changes lowered yields and lifted trim inventories in primary processing; expected to normalise as inventory stabilises and processes improve. Turkey production was reduced to match demand, lifting unit costs; improvement expected as inventory rebalances.
Outlook and assumptions
FY26 earnings are expected to be second-half weighted, reflecting weak 4Q25 trading, timing of operational improvements and inventory stabilisation post 1H actions.
Revenue is underpinned by slightly higher core poultry volumes and slightly lower NSP than FY25, with favourable wholesale margins anticipated to continue.
Operating costs (ex-feed) are rising with inflation and operational challenges but are expected to be materially offset by the $60–80 million savings program.
Feed costs should provide a modest benefit. FY26 capital expenditure is revised to $70–90 million (from $80–100 million).