Associated British Foods (ABF) reported resilient third-quarter trading, with its grocery division delivering sales growth driven by strong performances from Twinings and Ovaltine, while Primark posted higher revenues despite a challenging retail environment.
Group revenue rose 3 per cent at actual exchange rates in the third quarter to £5.3bn, while grocery sales increased 5 per cent at actual exchange rates to £1.04bn, or 1 per cent at constant currency. Year-to-date grocery revenue was £3.12bn, up 1 per cent.
ABF said grocery growth reflected good performances across several brands and businesses, although this was partly offset by continued lower sales in its US oils business due to reduced spending by its core Hispanic consumer.
Twinings recorded strong growth in key markets including the UK, US and Australia, driven by demand for its wellness tea range. Ovaltine also continued to recover following disruption caused by cocoa-related price increases last year.
The company also highlighted progress on its acquisition of Hovis after receiving approval from the Competition and Markets Authority.
ABF said combining the production and distribution operations of Allied Bakeries and Hovis is expected to generate significant cost synergies, allowing investment in product innovation and creating "a sustainably profitable bakeries business". The company said it is now working towards completing the transaction.
Meanwhile, Primark increased sales by 3 per cent in the quarter, helped by new store openings, although like-for-like sales fell 2.2 per cent as consumer demand remained subdued across most markets. In the UK, sales grew 1 per cent, with the retailer continuing to gain market share despite weaker trading in April and May, before improved weather boosted demand in June.
George Weston, chief executive of ABF, said: "The group delivered a resilient trading performance in the third quarter."
"While the retail environment remained challenging in most markets, Primark continued to strengthen its customer proposition... Grocery and Ingredients delivered solid results."
ABF left its outlook for the grocery business unchanged for the 2026 financial year. The group's overall guidance also remains unchanged, with the exception of its sugar business, where higher expected gas prices linked to the conflict in the Middle East have weakened the profit outlook.