AB Foods expects sugar unit loss to deepen

Associated British Foods said contract provisions due to low European sugar prices weighed on profitability for the unit.

Associated British Foods said it expects the adjusted operating loss for its sugar unit to deepen next fiscal year, as it prepares to spin off its retail arm housing fashion brand Primark.

Associated British Foods low European sugar prices weighed on profitability.

The British conglomerate anticipates the adjusted operating loss at the sugar business to be at the higher end of its previously guided range for the 2026 fiscal year. It had expected an adjusted operating loss of 25 million pounds to 60 million pounds ($33.9 million to $81.3 million) for the year ending Sept. 12.

AB Foods—home to the Twinings and Patak’s brands—also said it foresees the adjusted operating loss for the sugar unit to deepen for the subsequent 2027 fiscal year, in the range of 70 million pounds to 170 million pounds.

The company said contract provisions due to low European sugar prices weighed on profitability for the unit.

It expects to report sales growth of around 2% for its Primark budget retail business for the fourth quarter of fiscal 2026. Like-for-like sales are expected to fall 3% for the arm over the period.

Write to Aimee Look at aimee.look@wsj.com