Associated British Foods (LON:ABF – Get Free Report) announced its earnings results on Tuesday. The company reported GBX 156 earnings per share for the quarter, Digital Look Earnings reports. Associated British Foods had a return on equity of 8.44% and a net margin of 4.89%. The business had revenue of GBX 1,958.20 billion during the quarter.
Here are the key takeaways from Associated British Foods’ conference call:
- Group adjusted operating profit fell 14% and adjusted EPS declined 11%, with lower Primark profit the main driver; revenue was down 1% at constant currency. The dividend was held at £0.63 per share, and the company completed £250 million of buybacks.
- Primark sales grew 2% as new stores offset a 2.6% like-for-like decline, while its operating margin fell to 10.2% amid investment in pricing, product, marketing and digital, as well as higher markdowns. The U.K. returned to like-for-like growth, but continental Europe remained weak.
- Primark is expanding its growth plans through a Middle East franchise launch, a new Mexican partnership and planned U.K. home delivery by the end of 2027. Management said home delivery is designed to attract infrequent customers and be profitable without materially diluting group margins.
- Management expects group adjusted operating profit and adjusted EPS to be below 2026, mainly because of sugar, and cited continued caution around consumer sentiment, inflation and energy costs. European sugar recorded a £47 million adjusted operating loss, with high gas costs and low prices weighing on results.
- The proposed Primark demerger remains on track for December 2027, with management expecting two focused businesses and greater strategic flexibility. The group also highlighted Hovis integration synergies, which are expected to start in the second half of 2027 and contribute to earnings accretion in 2028.
Associated British Foods Trading Up 6.4%
ABF traded up GBX 121 during mid-day trading on Wednesday, hitting GBX 2,021. 85,449,734 shares of the stock were exchanged, compared to its average volume of 10,592,648. The firm’s fifty day moving average is GBX 1,911.35 and its two-hundred day moving average is GBX 1,915.42. Associated British Foods has a 1-year low of GBX 1,729.45 and a 1-year high of GBX 2,294. The company has a current ratio of 1.51, a quick ratio of 0.93 and a debt-to-equity ratio of 32.63. The company has a market cap of £14.11 billion, a PE ratio of 15.16, a PEG ratio of 1.51 and a beta of 0.81.
Wall Street Analyst Weigh In
Several equities research analysts have commented on ABF shares. JPMorgan Chase & Co. cut their price objective on Associated British Foods from GBX 1,700 to GBX 1,645 and set a “neutral” rating for the company in a research note on Friday, September 11th. Shore Capital Group reaffirmed a “hold” rating and issued a GBX 1,910 price target on shares of Associated British Foods in a research note on Tuesday, October 6th. Jefferies Financial Group reiterated an “underperform” rating and set a GBX 1,650 price target on shares of Associated British Foods in a research report on Wednesday. Finally, Citigroup reduced their price objective on Associated British Foods from GBX 1,550 to GBX 1,520 and set a “sector perform” rating for the company in a research note on Wednesday, September 23rd. Five research analysts have rated the stock with a Hold rating and two have assigned a Sell rating to the stock. According to MarketBeat.com, the company presently has an average rating of “Reduce” and an average target price of GBX 1,782.14.
Get Our Latest Analysis on Associated British Foods
Key Headlines Impacting Associated British Foods
Here are the key news stories impacting Associated British Foods this week:
- Neutral Sentiment: Group revenue increased, while quarterly results included earnings of GBX 156 per share. The revenue growth has not prevented pressure on profitability. Primark Owner AB Foods’ Revenue Rises Despite Sugar, Grocery Pressure
- Negative Sentiment: ABF reported a 13% fall in adjusted operating profit to £1.51 billion, with Primark and sugar weighing on performance. Reports also indicate the company expects full-year profit to decline further as fast-fashion sales slow. Associated British Foods Reports 13% Fall in Adjusted Operating Profit ABF forecasts further profit decline as fast-fashion sales slow
- Negative Sentiment: Jefferies reaffirmed its “underperform” rating and GBX 1,650 price target, signaling continued analyst concern about the shares. Jefferies Financial Group ratings
Associated British Foods Company Profile
Associated British Foods is a diversified international food, ingredients and retail group with sales of £13.9bn, 128,000 employees and operations in 53 countries across Europe, Africa, the Americas, Asia and Australia.
Our purpose is to provide safe, nutritious, affordable food, and clothing that is great value for money. With the breadth of our business, our brands and global reach, ABF aims to consistently deliver value to its stakeholders.
Our business is split into five segments: Grocery; Sugar; Agriculture; Ingredients; and Retail.
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