Associated British Foods (LON:ABF) Announces 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 business had revenue of GBX 1,958.20 billion for the quarter. Associated British Foods had a return on equity of 8.06% and a net margin of 4.75%.

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 Down 0.9%

Shares of Associated British Foods stock opened at GBX 2,002 on Thursday. Associated British Foods has a 52-week low of GBX 1,729.45 and a 52-week high of GBX 2,294. The stock has a market cap of £13.98 billion, a PE ratio of 15.02, a PEG ratio of 1.51 and a beta of 0.81. The firm has a 50-day moving average of GBX 1,910.49 and a 200-day moving average of GBX 1,916.18. The company has a debt-to-equity ratio of 33.20, a quick ratio of 0.93 and a current ratio of 1.50.

Key Stories Impacting Associated British Foods

Here are the key news stories impacting Associated British Foods this week:

• Positive Sentiment: Group revenue increased despite pressure on sugar and grocery, providing a counterpoint to the weaker profit results. Article: Primark Owner AB Foods’ Revenue Rises Despite Sugar, Grocery Pressure
• Neutral Sentiment: ABF reported quarterly EPS of 156p and revenue of £1,958.2 billion; the supplied report did not include a comparison with expectations. Article: Associated British Foods quarterly earnings
• Negative Sentiment: Adjusted operating profit fell 13% to £1.51 billion, with Primark and Sugar weighing on results. Reports also point to slipping fast-fashion sales and a forecast of further full-year profit decline. Article: Associated British Foods Reports 13% Fall in Adjusted Operating Profit
• Negative Sentiment: Jefferies reaffirmed its “underperform” rating and set a GBX 1,650 price target, signaling a cautious view of ABF’s prospects. Jefferies rating information

Analyst Upgrades and Downgrades

Several research firms recently issued reports on ABF. JPMorgan Chase & Co. dropped their target price on Associated British Foods from GBX 1,700 to GBX 1,645 and set a “neutral” rating on the stock in a report on Friday, September 11th. Citigroup lowered their price objective on shares of Associated British Foods from GBX 1,550 to GBX 1,520 and set a “sector perform” rating on the stock in a research note on Wednesday, September 23rd. 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. Finally, Shore Capital Group restated a “hold” rating and issued a GBX 1,910 price objective on shares of Associated British Foods in a research note on Tuesday, October 6th. Five investment analysts have rated the stock with a Hold rating and two have assigned a Sell rating to the company’s stock. According to data from MarketBeat.com, the stock presently has an average rating of “Reduce” and a consensus price target of GBX 1,782.14.

About Associated British Foods

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.