The Primark owner's warning that profit will fall again in its 2027 financial year, largely because of its sugar business, put it at the bottom of the FTSE 100 on Tuesday.

Associated British Foods (LSE:ABF) ended Tuesday 3 November 2026 as the FTSE 100's leading faller. Its shares closed 2.2% lower, having been down about 3% at midday, after the group published full-year results and told investors that adjusted operating profit and adjusted Earnings Per Share are expected to decline again in the year ahead.

The fall came on a difficult day for the wider market. The FTSE 100 dropped 122.90 points, or 1.14%, to 10,638.43, its steepest one-day fall in a month, according to Reuters. But ABF's decline was driven by its own news, and in particular by what the company said about the next 12 months rather than the year just finished.

A second year of lower profit

For the 52 weeks to 12 September 2026, ABF reported adjusted operating profit down 14% at £1,508m and adjusted earnings per share down 11% at 156.0p, on Revenue of £19.6bn, 1% lower at constant currency. Those figures alone showed a Business under pressure.

What appears to have weighed most on sentiment, however, was the outlook. ABF said it expects group adjusted operating profit and adjusted EPS for its 2027 financial year to be below 2026 levels, mainly because of its sugar division. In other words, investors were told to expect a further step down after a year in which profit had already fallen sharply.

That matters because the year just ended was already a reset: return on average Capital employed fell to 12.7% from 15.5%, and Grocery, Ingredients and Retail all reported lower profit.

A company forecasting lower profit is not unusual, but the combination of a weak year and a weaker outlook can change how the market values a business. Share prices often reflect expectations about future earnings, so a downgrade to the coming year can matter more to investors than results for a period that has already ended.

Sugar at the centre

The sugar business is the key swing factor. In the year just ended, sugar revenue fell 9% and the division swung to a £47m operating loss, compared with a £1m loss a year earlier. ABF attributed the deterioration to lower UK selling prices, provisions for onerous contracts, higher gas costs and lower crop yields.

An onerous contract provision is an accounting charge taken when a company expects the unavoidable costs of meeting a contract to exceed the benefits it will receive. Recording such provisions brings expected losses forward into the accounts, which helps explain why a division's reported result can deteriorate sharply in a single year.

For 2027, the company expects a sugar operating loss of between £70m and £170m. The width of that range reflects the uncertainties involved: ABF said the outcome will depend on gas costs, African output affected by El Niño, and currency movements. A £100m spread between the best and worst case is substantial, and it leaves room for the group's overall profit to vary considerably depending on how those factors develop.

Outside sugar, the guidance was more measured. ABF expects the Primark Operating Margin to be around 10% in 2027, compared with 10.2% in the year just ended and 11.9% the year before. New retail space is expected to add about 4% to sales growth.

Grocery and Ingredients are both expected to be broadly in line with 2026, while Agriculture is expected to be ahead. Taken together, the picture suggests the group-wide decline in profit is concentrated in one division, with the larger businesses expected to hold roughly steady rather than recover strongly.

Chairman George Weston struck a positive note on the year, saying: "This was a year of good strategic and operational progress across the group." The market's reaction suggests investors were more focused on the near-term earnings trajectory than on strategic progress.

No more Buybacks for now

Capital returns were another point of interest. ABF bought back £253m of shares during the year and paid £446m in dividends, and it has returned £1.9bn via buybacks over 2023 to 2026. However, the company said it does not plan further buybacks at this stage, as it wants to keep both future businesses well financed ahead of separation.

That separation is a central part of the ABF story. The group plans to demerge Primark from its food business, a process it said remains on track for December 2027. The total ordinary Dividend was held at 63.0p, comprising a 20.7p interim and a proposed 42.3p final.

The Balance Sheet showed net cash of £305m before leases and total net Debt of £2.8bn including leases, giving Leverage of 1.1 times EBITDA. Free Cash Flow was £652m, slightly above the prior year's £648m.

ABF was not the only consumer name under pressure. Coca-Cola Europacific Partners (LSE:CCEP) fell 2.1% after flagging cost pressures, while miners and banks dragged on the wider index. Even so, ABF's position at the top of the fallers list reflected a company-specific reassessment, prompted by the outlook for 2027, rather than simply the broader market mood.

Key dates to watch

Thursday 12 November:ONS first quarterly GDP estimate for July to September 2026 (7:00am), a read on the UK consumer backdrop.

Wednesday 2 December:FTSE Russell December index review announcement, after the UK close.

April–July 2027:ABF investor events, covering AB Foods (April), Grocery (May), Ingredients (June) and Sugar & Agribusiness (July).

December 2027:Planned Primark demerger from ABF's food business.

The bottom line

ABF fell 2.2% on Tuesday because it paired a 14% fall in adjusted operating profit with a forecast that profit will decline again in its 2027 financial year. The sugar division, guided to a loss of £70m to £170m, sits at the heart of that outlook, while the decision to pause buybacks ahead of the Primark separation added another consideration. The planned investor events next year, including a dedicated Sugar & Agribusiness session in July, may offer more detail on how the group intends to manage these pressures.