AB Foods says profit will be lower after weaker Primark and food sales

Associated British Foods warned it expects group adjusted operating profit and earnings per share to be lower than last year after Primark reported weak holiday sales and the food arm delivered mixed results.

Associated British Foods (AB Foods) warned that profit this fiscal year will be lower than last year, citing weaker sales at its Primark fashion chain and a mixed performance across its food businesses. Primark faced a challenging holiday period in continental Europe, while the company also said it increased markdowns to manage stock levels. The food division, which includes well-known grocery brands, saw softer demand in some markets. The company now expects group adjusted operating profit and earnings per share to be below last year. Key points: - AB Foods expects group adjusted operating profit and earnings per share to be lower than last year. - Primark had a difficult holiday season, with like-for-like sales down 5.7% in continental Europe over the 16 weeks to Jan. 3, and comparable sales up 1.7% in the UK. - The article mentions the company increased markdowns to manage stock, which reduced profit, and that shares fell as much as 12% in early trading in London. - The food business produced mixed results, and the grocery and ingredients arms are expected to deliver profit moderately below last year amid softer consumer demand in some markets. Summary: The warning signals a weaker financial outlook for AB Foods driven by lower Primark sales and softer food-market demand, and it has translated into a notable market reaction. Undetermined at this time.