ABF Q4 trading update: Primark demerger progress and financial outlook

UK-based conglomerate Associated British Foods (ABF) has issued a trading update for the fourth quarter of fiscal year 2026 ended September 12, 2026, revealing that group adjusted operating profit is expected to align with previous expectations, while adjusted earnings per share will exceed prior forecasts.

Work on the planned demerger of ABF's retail arm, Primark, from its food divisions is progressing and remains scheduled for completion in December 2027.

“The Group delivered resilient trading in the quarter,” said George Weston, chief executive of ABF. “Actions to strengthen Primark’s customer proposition have continued at pace. Our priority focus areas, the UK and womenswear, continued to outperform our other markets and categories.”

Primark top-line growth driven by store expansion

For the fourth quarter, Primark’s total sales are expected to increase by around 2 percent, supported by a 5 percent contribution from new store openings and franchise partnerships. However, like-for-like (LFL) sales are projected to contract by approximately 3 percent.

For the full 2026 fiscal year, total Primark sales are expected to rise by around 2 percent, with LFL sales down 2.6 percent. The retail division expects to deliver a full-year adjusted operating margin of approximately 10 percent.

In July 2026, the value retailer launched its ‘Iconic Value’ campaign across all markets, introducing reduced prices across hundreds of autumn/winter 2026 items. Primark noted positive early volume responses in nightwear, leisurewear and performance clothing. Womenswear remained the retailer’s top-performing division across all geographical regions.

Regional market performance and international franchise expansion

In the UK, fourth quarter Primark sales are expected to grow by around 1 percent, with LFL sales remaining broadly flat. Initial strong quarterly momentum was temporarily slowed by prolonged warm weather, which delayed consumer purchasing of AW26 apparel, before demand recovered toward the end of the period.

Continental Europe continued to experience weak consumer confidence, with fourth quarter sales projected to fall 1 percent and LFL sales down around 4.3 percent. In response, Primark increased marketing investments in key markets, including Spain, France and Italy.

US sales are expected to expand by around 11 percent during the quarter. Primark opened six new US stores in the fourth quarter, including a location in Manhattan, bringing its total US estate to 47 stores.

Primark also expanded its international franchise model. Following strong fourth quarter trading across its locations in Dubai and Kuwait, the retailer extended its agreement with Alshaya Group to enter Saudi Arabia, with a first store scheduled to open in spring 2027. Additionally, the company signed a franchise agreement with El Puerto de Liverpool to launch stores in Mexico.

E-commerce evolution and future outlook

Building on its digital strategy, Primark announced plans to launch home delivery services in Great Britain, alongside the continued expansion of its Click & Collect offering. To support this logistics shift, the company acquired a highly automated fulfilment facility in Sheffield.

Looking ahead to fiscal year 2027, ABF expects Primark to maintain an adjusted operating margin of approximately 10 percent, supported by a 4 percent sales growth contribution from new store space in Europe, the US and franchise territories.

ABF is scheduled to publish its full annual financial results for the 52 weeks ended September 12, 2026 on November 3, 2026.