Associated British Foods, the owner of Primark, reported a 14% fall in adjusted operating profit to £1.51 billion for the year to 12 September 2026 and said profit and earnings per share will be lower again in 2027. Sugar losses drive the warning, while Primark’s growth plans include franchise partners overseas.
ABF published its annual results on 3 November 2026. Group turnover was £19.58 billion, and adjusted operating profit was £1.51 billion, down 14% at constant currency, with adjusted profit before tax of £1.46 billion, also down 14%.
Adjusted earnings per share fell 11% to 156.0p, while free cash flow was £652 million and the total dividend was held at 63.0p. The board said 2027 adjusted operating profit and earnings per share will be below the 2026 level, with the sugar division the principal cause.
Primark trading and the franchise route
Retail Gazette reported that ABF’s September trading update, published on 10 September 2026, expected Primark’s full-year sales to rise by about 2%, helped by new stores and franchise expansion, while like-for-like sales fell 2.6%.
Comparable sales in continental Europe were forecast to fall 4.7%, while the UK and Ireland were expected to grow 0.5%. Primark’s first franchise store, a 60,000 sq ft flagship over two floors, opened in Kuwait in October 2025 through a partnership with Alshaya Group, and the retailer said it was preparing three stores in Dubai for early 2026. Eoin Tonge, then interim chief executive of Primark, called the move an “important and exciting new growth chapter”.
Where the franchise partnership sits
The franchise partnership described in the sources is with Alshaya Group in the Middle East. The UK and Ireland comparable sales figure above is a trading measure reported by ABF and is separate from it.
Sugar losses and the Primark demerger
ABF guided to an adjusted loss in its sugar division of £70 million to £170 million in 2027, citing higher energy costs, low European sugar prices and difficult production conditions, according to Retail Gazette. The group also said preparations to separate Primark from its food businesses are progressing as planned, with the demerger expected to complete in December 2027. The split, announced in April 2026, would produce two separately listed companies.
Consumer caution and home delivery
ABF said it remains cautious about consumer spending, inflation and rising energy costs. Primark has had a difficult trading environment in continental Europe, where weak consumer confidence has weighed on sales, and it has been investing in lower prices, marketing and its womenswear offer to improve performance.
In Great Britain it is preparing to introduce home delivery, supported by an automated fulfilment facility in Sheffield that it has acquired, according to Retail Gazette. The next reference point for the group is the trading it reports for the new financial year, which ABF has said will be lower in profit terms than 2026.
The results also show gross investment rising to £1.43 billion and return on average capital employed falling to 12.7% from 15.5%, while the group completed £253 million of share buybacks.
