Key Highlights

  • Associated British Foods plc (LSE:ABF) closed up 121p at 2,021p on 4 November 2026, a gain of about 6.4%.
  • The rebound followed a fall on 3 November, when full-year Earnings dropped 14% and adjusted operating profit came in at £1.51 billion.
  • The group expects profit in the year to September 2027 to be below 2025/26 levels, largely because sugar losses could widen to as much as £170 million.
  • The demerger of Primark from the food businesses remains on track for December 2027.

Why AB Foods Is in Focus Today

Associated British Foods plc (LSE:ABF) staged a sharp recovery on Wednesday, 4 November 2026, ranking among the top risers on the FTSE 100. The shares climbed 121p to 2,021p, a gain of around 6.4%, as investors reassessed the group's full-year results released a day earlier. On Tuesday the stock had been one of the weakest performers on the index after the company reported lower annual profit and forecast another year of decline.

The bounce came on a day of broad buying across London, with the FTSE 100 rising 1.8% after the US midterm elections. Investors who had sold on the headline profit warning appeared to look again at the longer-term value in Primark and the food portfolio, as well as the progress being made on the planned separation. Several investors also noted that much of the bad news, particularly in sugar, had already been flagged during the year, which limited the scope for further downside once the detailed numbers were digested.

Full-Year Results Recap

For the 2025/26 financial year, group Revenue fell 1% at constant currency to £19.58 billion. Adjusted operating profit was £1.51 billion, and earnings declined by about 14%. Primark's adjusted operating profit fell 12% to £1.0 billion as like-for-like sales declined 2.6%. Grocery profit dropped 11%, mainly because of weaker earnings from its US oils business. Sugar losses widened to £47 million, reflecting lower average selling prices in Europe.

Chief executive George Weston said any consumer-facing Business is trading with the reality of shoppers whose spending power has been reduced. The group remains cautious on consumer sentiment and on the impact of Inflation and higher energy costs.

Outlook for 2026/27

AB Foods said adjusted operating profit in the year to September 2027 would be below the £1.51 billion reported in 2025/26. The main reason is the sugar business, where losses are expected to widen to between £70 million and £170 million. Primark's adjusted Operating Margin is forecast at around 10%, compared with 10.2% last year, and store expansion in Europe, the United States and Franchise markets should add around 4% to sales growth. Grocery profit, which includes Twinings, Ovaltine and Ryvita, is expected to be broadly unchanged.

The Primark Demerger

The defining strategic event for the group is the planned demerger of Primark from its food businesses. Management said the work is progressing well and remains on track for completion in December 2027. Weston said he would like to see better results going into the separation and suggested that energy prices may look very different in a year's time. He also indicated that Primark will start offering home delivery in Britain before the demerger, a notable step for a retailer that has long relied on stores. Primark has been cutting prices on hundreds of bestselling lines and strengthening its Leadership team, including the appointment of a new finance chief, as it prepares to stand alone.

Risks to Consider

The biggest near-term risks are weak European consumer demand, which has hit Primark like-for-like sales, and volatile sugar prices in Europe. Energy costs remain elevated, affecting both Manufacturing and retail. Execution risk around the demerger, including separation costs and the Capital Structure of each business, will also be scrutinised.

What Investors Are Watching Next

Christmas trading at Primark will be the next key test, with an update typically issued in January. Investors will watch for signs that price cuts and product changes are improving like-for-like sales, particularly in Europe. Further detail on the demerger structure, listing plans and capital allocation for each business will be important milestones through 2027. Sugar prices and energy costs will also shape the earnings path. In the short term, the Bank of England decision on 5 November and UK consumer data could influence sentiment toward Associated British Foods plc (LSE:ABF).