Associated British Foods shares sank 8.3% to 1,337.5p in early morning trading on Thursday following a lower adjusted operating profit and adjusted EPS guidance for FY 2023, linked to the cost of living crisis.
The firm also highlighted the effects of macroeconomic uncertainty on its Primark business in FY 2023, with the strengthened US dollar and higher energy costs driving a stiff rise in expenses.
Associated British Foods noted the fall in consumer income would likely dent its Primark sales next year, alongside a lower operating profit margin expected for HY2 2022.
The company mentioned its adjusted operating profit and adjusted EPS for FY 2022 saw a “significant increase”, with price actions driving Q4 sales growth.
Meanwhile, adjusted operating profit outlook for grocery, sugar and agriculture sectors were reportedly in line with expectations.
Associated British Foods said improved trading in its ingredients business was projected to deliver higher operating profits.
Its Primark sales were anticipated to climb 40% to £7.7 billion, ahead of reported sales the year before at constant currency, along with an expected FY 2022 operating profit margin of 9.6% and a HY2 8% operating margin.
Associated British Foods noted approximately £1.5 billion in net cash before lease liabilities and net debt including lease liabilities of £1.7 billion.
The company added its board would consider in November whether the group had sufficient surplus cash and capital available for shareholder returns.