The owner of clothing giant Primark has seen its share price drop dramatically after it issued a profit warning.
Shares in Associated British Foods plc fell 13% today after it told the markets that it expects adjusted operating profit and adjusted earnings per share to fall in 2026. It previously forecasted that they would rise.
In 2025, ABF reported revenues of £19.5 billion and adjusted operating profit of £1.7bn.
The group, headquartered and listed in London, said two months ago that it was considering separating its fashion and food businesses. Described as operating a digitally-enabled, store-led model, Primark had 473 shops across 17 countries at the end of the 2025 financial year and is the flagship brand of ABF, despite being something of an outlier.
Primark, which employs 83,000 people, saw a 5.7% drop in sales in continental Europe in the 16 weeks to 3rd January, which ABF said would hit its profits. This accounted for almost half of Primark’s total sales. Primark’s UK sales rose 1.7% in the same period.
“Overall, Primark’s sales growth in the period was below our previous expectations and we now expect Primark’s sales growth in the first half of 2026 to be in the low single digits,” ABF said.
“In a difficult trading environment, we significantly increased markdowns to manage inventory levels effectively, which impacted profitability.”
ABF’s grocery business includes brands such as Twinings, Kingsmill, Ryvita, Silver Spoon and Patak’s. It also has ingredients, sugar and AgriFood divisions.
The wider group, which has 138,000 staff across 56 countries, also reported poor US sales in its food business.
The Competition and Markets Authority said today it would refer the proposed merger of Kingsmill with Hovis for a more in-depth investigation.
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