Associated British Foods (LON:ABF) Posts Earnings Results

Associated British Foods (LON:ABF) announced its earnings results on Tuesday. The company reported GBX 156 earnings per share (EPS) for the quarter, Digital Look Earnings reports. The firm had revenue of GBX 1,958.20 billion during the quarter. Associated British Foods had a return on equity of 8.44% and a net margin of 4.89%.

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 Stock Performance

Associated British Foods stock traded up GBX 121 during trading hours on Wednesday, reaching GBX 2,021. 85,449,734 shares of the stock were exchanged, compared to its average volume of 10,592,648. The stock has a market cap of £14.11 billion, a P/E ratio of 15.16, a P/E/G ratio of 1.51 and a beta of 0.81. The company has a debt-to-equity ratio of 32.63, a quick ratio of 0.93 and a current ratio of 1.51. Associated British Foods has a 52-week low of GBX 1,729.45 and a 52-week high of GBX 2,294. The firm’s 50 day moving average is GBX 1,911.35 and its 200 day moving average is GBX 1,915.42.

Wall Street Analyst Weigh In

A number of equities research analysts have weighed in on ABF shares. 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. JPMorgan Chase & Co. decreased 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 report on Friday, September 11th. Shore Capital Group reaffirmed a “hold” rating and issued a GBX 1,910 target price on shares of Associated British Foods in a report on Tuesday, October 6th. Finally, Jefferies Financial Group reaffirmed an “underperform” rating and issued a GBX 1,650 target price on shares of Associated British Foods in a report on Wednesday. Five research analysts have rated the stock with a Hold rating and two have issued a Sell rating to the stock. Based on data from MarketBeat.com, Associated British Foods currently has an average rating of “Reduce” and an average target price of GBX 1,782.14.

Trending Headlines about 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.