Associated British Foods PLC (LSE:ABF) shares led the FTSE 100 fallers on Wednesday after it warned that weaker sugar trading will hit profits this year, while Primark saw mixed sales in the third quarter.
The FTSE 100 retailer and food producer said that, aside from sugar, its full-year outlook was "unchanged", expecting adjusted operating profit and adjusted EPS to be below last year, while sugar is now expected to make a larger adjusted operating loss of £25-60 million.
This was blamed on lower European sugar prices, higher gas costs linked to the Middle East conflict, and uncertainty in Africa
Discount fashion chain Primark saw LFL sales shrink 2.2% in the 16 weeks to 20 June, though total sales were up 4% to £2.9 billion thanks to new stores adding 5% to growth and currency swings.
In the UK, Primark LFL sales were broadly flat while total sales rose 1%. Trading was said to have been helped by better weather in June and increased marketing, including the launch of an app.
Continental Europe remained tougher, with sales down 1% and LFL sales dropped 3.6%, while US sales rose 16%, helped by three new stores, including Primark’s first Manhattan shop.
Chief executive George Weston called it a "resilient trading performance" from Primark. He said the retail environment "remained challenging in most markets", but new product launches, a "sharper focus" on price and increased investment in marketing.
As for the Sugar arm, revenues grew 4% to £451 million in the quarter, while Grocery sales rose 5% to £1.04 billion, up 1% on a constant currency basis.
Group revenue was £5.3 billion in the quarter, up 3% at actual exchange rates but flat on a constant currency basis.
ABF said the planned demerger of Primark from the food business remains on track for before the end of the 2027 calendar year.
The shares fell 2.4% to 1,938p, down 10% since the start of the year.
Broker Jefferies called it a "mixed Q3", calling it an "optically-better" Primark performance that was probably helped by quarterly timing.
Analysts noted that Primark benefited from the delivery cadence, with a strong March followed by weaker April and May before better weather helped June.
LFL sales were better than the wider City consensus, but this did "not ... necessarily" imply a better full-year outcome than the consensus currently expects.
The broker said Sugar downgrades were likely to be the "dominant factor", cutting about 2% from 2026 financial year group EBIT and about 4% from 2027 at the midpoint of the new Sugar loss guidance range.
** UPDATE: Adds share price and broker comment **
