Associated British Foods plc (ABF.L) Q1 FY2026 Earnings Call Transcript & Summary

Good morning, everyone. Thank you for joining the call. This morning, we published a trading update for the first quarter of ABF's 2026 financial year, that is for the 16 weeks to 3rd of Jan. We have brought forward this update, and this is due to the weaker-than-expected performance in Primark over the period. The period has just closed. We are still finalizing the Q1 numbers for the individual businesses and for the group. However, the release provides our best estimates of where we expect to close the period. George would very much wanted to be on this call. It hasn't been possible given the timing is with our businesses in the U.S. this week and is currently on a flight back. In the light of the information of this release, we are updating the market as soon as possible. And I've asked Eoin Tonge to join today to share some additional color on the performance in Primark. Before we move to Q&A, I'll briefly set out the key elements of today's trading update. I'll start with Primark. Primark's total sales were up approximately 1%. Performance between our different markets was mixed with a continuation of the same trends we had in the second half of 2025 and which we highlighted in November. So in the U.K., total sales grew 3%, like-for-like sales grew 1.7% and Primark gained market share in a difficult retail environment. And as has been well covered in the media, consumer sentiment remained weak and the Christmas trading period was particularly disappointing for clothing retail and mild weather didn't help. However, as we set out in November, the range of actions we've taken in the U.K. to improve Primark's customer proposition has continued to drive an uplift in sales. We're focused on improving price perception, strengthening our product offer, increasing the use of digital marketing, driving growth in Click & Collect and refurbishing our store estate. We've seen good results from actions to date, particularly in womenswear, and there's much more to come. As I say, Eoin will be able to provide some more color on these. In Continental Europe, the consumer environment has continued to be tough without any meaningful improvements over Christmas for our consumers. We are focusing on value we offer our customers in those markets, but we haven't yet rolled out those same initiatives that we had in the U.K., although they are now underway. And given the positive reaction we've seen in the U.K., we do expect this to drive improved performance in Europe in the coming months. Again, Eoin will provide more detail. In the U.S., the retail environment has been volatile, and this impacted consumer sentiment and footfall. Across markets, our new store rollouts were well executed. We opened 11 new stores in Q1, and as expected, new space contributed around 4 percentage points to Primark's total sales growth. We are particularly pleased to have opened our first franchise store in Kuwait, which has been trading very well. Overall, Primark sales growth in the period was below our previous expectations, and we now expect Primark sales growth in the first half of 2026 to be in the low single digits. In a difficult trading environment, we significantly increased markdowns to manage inventory levels effectively, which has impacted profitability. We have a broad range of initiatives in place and planned for the coming months, which we expect to drive improved sales and profitability, particularly in Europe. However, if Primark's current sales trends were to continue in the second half, we would expect the adjusted operating profit margin for the full year to be approximately 10%, similar to the first half as we continue to invest in growth. It should be noted that the first half of 2025 had a nonrecurring benefit to profit of EUR 20 million. Moving now to our Food businesses, where we had a mixed performance in Q1. In the U.S., as we said in November, we had expected ongoing consumer weakness to lead to lower sales. We have seen a worsening in this trend. In our cooking oils and Bakery Ingredients businesses, the impact has been more acute than anticipated, and we are more cautious on the outlook. As a result, we now expect both Grocery and Ingredients segments to deliver adjusted operating profit for the full year that is moderately below last year. In Grocery, the effective phasing means the impact will be more significant in the first half of the year. In our U.K. Bakeries business, we are focused on achieving regulatory clearance as quickly as possible for our acquisition of Hovis. We are making good progress, and we are pleased to have now moved into Phase 2 of the CMA's review. For our other food businesses, Sugar and Agriculture, there's no change from the guidance we gave you in November. For the group, we now expect group adjusted operating profit and adjusted EPS to be below last year. With that, I'll hand you over to you for questions.

[Operator Instructions] And your first question today comes from the line of Richard Chamberlain from RBC.

A couple of questions, I guess, probably for Eoin, if you're on the line, Eoin. Happy New Year, sorry, tough first half. But the first one would be, given the accelerated sort of channel shift online, we seem to be seeing, particularly in Mainland Europe, is there anything that Primark can do to accelerate its digital strategy in Europe? I'm thinking about Click & Collect plans, use of stock checker, that sort of thing, improving the digital experience. That's the first one. And then in terms of Primark U.S., is that a market thing, do you think? Are we seeing sort of consumer weakness, particularly in sort of Primark segment there? Is that across the board? Or has that been sort of concentrated in certain areas of the U.S.

Thanks, Richard. I'll start, and then I'll hand over to Eoin, if that's okay. So the channel shift to digital in Europe, well, we are continuing to work on digital initiatives. And certainly, in the U.K., our digital presence, and we do have Click & Collect in all our stores is helping to drive the push on those initiatives. For the U.S. and the reason why I'm answering the question, we -- it is a theme across not just Primark, but there's definitely a lot of volatile consumer behavior, and we do feel the environment is volatile, not just for Primark, but as we pointed out, for other U.S. businesses, particularly U.S. oils and our bakery ingredients. Eoin?

Yes. So yes, so look, on the European piece, look, of course, there's more we can do on the digital side of things. I think it will take a little bit of time to get transactional like Click & Collect into some of the countries, but we can do more before that. I mean, interestingly, I think if I look at sort of performance in Europe and particularly if the -- if I look at some of the categories, particularly that have underperformed, it's not, I would say, online competition where we've really suffered, if you will. It's more bricks-and-mortar competition. But that being said, I think the future of direction of travel is for us to get more digital into Europe. And I think that's somewhat inevitable. Now on the U.S., yes, nothing more really to add to what Joana already said. I think look, as we said in November, like I mean, I think it's just going to be a very bumpy road. I think with the tariffs and with everything else that's going on, I mean, I think it is just a challenging environment. I think we'll navigate through it. It will probably be another 12 months is my guess, of sort of like uncertainty volatility. But we just have to navigate through it. I don't think it makes much difference to the kind of our sort of long-term point of view in relation to the U.S.

We will now take the next question. And the question comes from the line of Jon Cox from Kepler.

First question, just really on the plan for the -- or the review of the split of the 2 businesses. Just wondering if the profit warning has an impact potentially delaying any sort of decision or if not actually scrapping that plan because maybe it shows that being sort of like a conglomerate is actually not a bad thing to be if parts of the business aren't working. That's the first question. Second question, just on that, am I understanding you right, Eoin, you are saying that Click & Collect will ultimately be rolled out into Europe? I don't think I've heard you say that before.

Thanks, Jon. Happy new year to you as well. The review of group structure, as we said, it is ongoing. The decision has not been made, and we will update in April, as we said. Just to remind a couple of the things we said at that point in time, the purpose of the review is to assess the long-term benefits of the separation. It's understanding what's best for the shareholders and the businesses in the medium to long term. So today's trading update is not impacting that per se. The core rationale remains the same. Primark is at scale, there's complexity. The food is less well understood, and we think that, that is something that we can benefit by having the 2 businesses separate. So that rationale still holds. And continue to be true. So at this point in time, the trading update does not mean anything else than what we are updating, which is making sure that the guidance is appropriate to the market. It's a separate topic from the review. The second question on Click & Collect. What -- I think Eoin has mentioned it in the past that we do have plans to roll in Europe. It's the timing and how we have the right infrastructure to do so and to be able to benefit from that digital activation. Eoin?

Yes. Look, look, I don't think the answer for us to improve performance in Europe is just about Click & Collect. I think there's a number of things that we believe we need to do. I mean, initially, it's going to be about just getting -- improving our product proposition, getting more customer engagement. I think they're the kind of -- they are the priorities. I mean we feel pretty good that we can get back on the front foot into Europe on the back of that. I think the -- I think I have said before actually that I would see us going in Click & Collect into Europe in time. And so I think that's going to be part of the journey as well. But I don't -- I think there's plenty more we can do to get back on the front foot in Europe.

I wonder if I just quickly follow up on grocery and the weakness there. I wonder if you could just talk about any particular segments at all, a lot of news flow on GLP-1s. We saw the U.S. new dietary recommendations come out overnight. Any thoughts on that on your grocery portfolio and maybe some of the weakness we're seeing?

Yes. I mean, at the moment, what we're seeing and certainly you have seen in this first quarter is a continuation of what we had seen before, which is linked to the U.S. consumer being quite subdued and particularly in some of our customer base of the Hispanic population following everything that's been happening. from April onwards. So there's definitely a consumer piece. And again, that's impacting our bakery ingredients customers that are seeing those volume declines on the bakery ingredients, and therefore, we are seeing volume declines as well. GLP-1 is a good question, and we're certainly following it closely and monitoring closely. It feels that it's a bit too early to call that as one of the impacts, but we are looking at what does that mean. At the moment, it feels like the biggest factor is that this consumer that is going out less, the food services is down. So there's quite a lot of factors that just point to our customer base being quite subdued.

Will now take the next question. And the next question comes from the line of Adam Cochrane from Deutsche Bank.

A couple of questions on Primark, if I can. In terms of the European performance, can you give any -- is there any differences by region across Europe? And what I'm really thinking about, is this weakness driven by lower footfall into the stores? Is it lower basket size? And when you're sort of analyzing this, is there any concern over brand awareness, price perception that is completely different between the U.K. and Europe? Or is it really just you think the initiatives that you've taken in the U.K. that's the main difference between there in Europe? And the second question I've got is you talked about sort of increased markdown. Historically, you've had quite an effective clear-as-you-go mechanism for clearing through inventory. But looking forward now, do you have to think about changing the amount of product that you're buying given this weakness in the European consumer to try and manage the profitability? Or how are you going to balance between sales and profitability?

Thanks, Adam...

Do you want me to?

I will -- yes, sure, Eoin, go with the European performance. I probably will comment on the markdown as well, but go for it.

Yes. Look, I mean, there have been differences across the different markets, I guess, over the last, I would say, 12 months. But that being said, I mean, I would say that if I look in the period, there's been a sort of just general weakness in a lot of our markets across Europe. I think there is quite significant market weakness as well. I don't think a lot of this -- a lot of this is actually market forces. I mean some of it -- some surprises on our end and some of it's kind of always -- there's always kind of when you look back in time, execution things that we could do better. And I'll come back to that when I talk about the markdown point. But if I look at -- France and Italy have been a bit challenging. Germany hasn't been great. Spain has been okay. It didn't have a great Christmas, not that dissimilar to what we saw in the U.K. So I think in France and Italy, it has been a little bit more about kind of footfall and Germany to a certain extent. I think a lot of the things that, yes, we have to work on are the same things that we have been working on in the U.K. I think brand awareness is not a problem in Spain. It's a bit of a problem in France. We're not hugely scaled in France. We are strong in the metropolitan areas, but that's to a certain extent. And a little bit in Italy, but just again, it's a scale point. I think the price perception points are -- were I think have been evident for the last 12 months or so. I think we need to -- as I said in November, I think we need to get back on the front foot in relation to us being, again, being known for the sharpest on prices and with proper blue water. So that's the reason why we're rolling out major fines into Europe into the second half of the year or sorry, from now actually. So I think a lot of those kind of things are the same. And like awareness, there is definitely more we can do on the customer engagement side. If I look at some of our competitor base, bricks-and-mortar in most cases, they are doing more on the customer engagement side of things. On the markdown, before I hand back to Joana, the -- look, I mean, obviously, we've been asking ourselves that question an awful lot in the last few weeks as to what you would do differently, et cetera, and so on. We did come into this year with strong expectations. We didn't think they were unrealistic. They look now a little bit unrealistic, obviously, in hindsight. But I think some things have surprised us. I think probably surprised the marketplace, cold weather product, in particular, sort of has not been -- has been soft and as a result of that's been a large part of the markdown. Christmas performance, as we've talked about. And I think to a certain extent, just general distress in the marketplace has impacted as well. So I think, yes, there are clearly learnings. I mean, I think particularly on that cold weather side of things, I think we will have to think a little bit more differently as we go forward. So yes, you always have learnings when you come through an environment like we just had.

And I'm not going to add much into that. Just on the expectations for the full year margin of the 10% if the current performance continues. Of course, as Eoin said, what we are expecting is to get that like-for-like growth moving, particularly in Europe now, and we've seen it in the U.K. But the assumption at the moment is, yes, if we have the same performance, we would have those markdowns. But we are expecting to see some of that traction coming through with all the initiatives that Eoin has started mentioning in his answer.

Does any of this change your outlook for the store sizes that are required in your European rollout? I know that over the time, you've changed store sizes in the U.S. and Germany and other places. is this going to change what your ideal Primark store looks like across Europe for your new stores?

I'm not sure the last period changed it too much. I think, Adam, I think the -- we have been reducing the store sizes anyway actually. I mean if you look at the stores we've opened in France more recently, they've been smaller than historically. So I think we have been reducing that anyway. So I think there's a lot more that goes into sort of how we think about the store sizes like obviously, also thinking about sort of what the future overall sort of channel kind of approach might be, et cetera, and so on. But look, I think we've already been reducing the store sizes. We would only be targeting kind of large store formats in sort of primary metropolitan areas. So look, yes, I'm not sure -- I don't think the last period of time is giving me cause for thought. It's more about how we think about the long term.

Your next question today comes from the line of Sreedhar Mahamkali from UBS.

A couple of questions, both on Primark, please. Firstly, I guess if you could -- I mean, you just referred to the markdown. And clearly, that must be a meaningful part of the margin decline of 160 basis points. Could you just help us deleverage versus that markdown impact so that we can start to get our models in line for next year? And also, while we're there, anything you can help us in terms of how we should think about Primark margins into next year more midterm? That's the first question. Secondly, you referenced to improving price perception in the U.K. Can you just give us a little bit more context there? When have you started to see these improvements? And when did that actually start to turn into better sales trends? Just give us a bit of a time frame so we can think about what we should be modeling over time in Europe as well?

So on the markdowns, and actually, I think it's a relevant question as we look at the bridge between our expectations and now. The difference between what we said before, which is just slightly below last year's margin and where we are guiding now, which is the 10% is really mostly the markdown. So if you think in terms of moving parts, that is the bulk of it. The deleverage is a factor, but actually, we are taking some mitigations against that. It's still a part, but the big bulk is markdowns, as you mentioned. And into midterm, if you're meaning in terms of margin going forward, well, it's too early to guide anyway. We don't even know what are the tailwinds or headwinds definitely for going into next year. And in any event, I think I'll repeat what we've said before, which is we are putting things in place to drive like-for-like top line growth. So the purpose is not to guide to a target margin. So focusing on top line sales. And the price perception in the U.K., maybe Eoin?

Yes. Price perception, yes. Yes. Look, I think -- I mean, I think you can see from the market share -- I mean, there's a few different ways of looking at price perception, right? I mean, I guess the ultimate one is probably our market share performance, which is where we're kind of getting back to relatively consistent market share growth, which is good. And I guess to a certain extent, that's been happening for the last 5 months or so, and which I think is good. I mean it's probably a number of things. I think we are quite pleased with how the major fines has sort of helped remind people of our price performance. So -- so I think -- and that's been going for the last few months in the U.K. And if we look at our -- if we look at Brand Tracker, certainly that we've seen a good improvement as well on that. And so yes, I mean, it's been a matter of months, I would say, Sreedhar, in terms of where we've been able to sort of kind of get back on -- in sort of getting that perform as well. I mean I think there's still work to be done, right? Like we -- I think major fines is only one element of it. I think there's a number of elements to it. So I think we're pretty committed, as I said in November, to really getting back to properly being a proper value leader. And I think that the major fines is one aspect of the things we're going to do from now and into the future. So I think that's what I'd say. And hopefully, that will kind of see us getting back into growth, both in Europe and continued growth in the U.K.

And the next question comes from the line of Georgina Johanan from JPMorgan.

Three questions from me, please. First of all, just in terms of Eoin, you made some comments sort of seeming to suggest that it wasn't online players who were taking share in Europe, but rather maybe some particular bricks-and-mortar competition had stepped up. Am I understanding that right? And if so, is there a particular player who has improved incrementally? And is that a local player or a kind of a global player? Any color on that would be really helpful, please. Second question, just in terms of the markdowns, is that spread quite evenly across markets? Did you experience a significant increase in markdown in the U.K. as well. I, of course, ask given that, that market was in positive like-for-like territory. And then finally, just in terms of pricing in the U.K., I know you're doing a lot of work around price perception. But I just wanted to understand, have you actually lowered like-for-like prices in the U.K.? And if so, by how much, please?

Thanks, Georgina. Happy New Year to you as well. I'll take the markdowns and then hand over to Eoin, if that's okay. As you would see the performance in the U.K. means that we would have more markdowns in Europe. But all that said, the markdowns were not predominantly in Europe. There was a spread across the different geographies, but less so in the U.K. In terms of the other 2 questions, Eoin?

Yes. Yes. No, I mean, I think -- no, I mean, Georgina, when we'll be looking through the sort of relative calculative performance and sort of trying to see where we've won and where we've lost. it's clear to me, it's not a pure-play online story alone. Maybe that's the point that I'm making here. Like so if I was going to say there's parts of accessories that is clear that is a bit more sort of pure-play online. But if I look at kind of places like to a certain extent, kidswear and a bit on home, I'd -- if we look at that, that more local bricks-and-mortar type of competition. So it's obviously different by different category, different need state, et cetera. But I guess my point I was saying here is that it's not just a pure-play online point. And for each of those cases, I think we know what we need to do. Some are a bit trickier than others, but I think we know what we need to do. And some of it is increased competition. Some of it -- I don't think we've executed as well as we could do or at least we know what we need to do to adapt. So hopefully, that helps. Pricing in the U.K., no, no. I mean the primary kind of pricing element that we've done so far in the U.K. is on the major fines, which is much more selective pricing. And yes, so we'll watch this space in terms of what we might do into the future. But for now, that's all we've done.

Yes, so we have not moved like-for-like prices Georgina.

That's really clear. If I just may follow up on that point on the bricks-and-mortar and sort of the competition. So it's not like you're saying there's actually been a step change in the competitive environment from a particular player or a new entrant or something like that?

No. I mean I think if you were to look back a longer time, I mean, it's not -- I think -- I mean, you guys know this better as much as I do is that there has been growth in the sort of the less more kind of pure apparel players. And there's been growth in those types of players. So -- and that's probably happened over time. I don't think it's not the last period of time. So in some categories like, for example, home, that has been -- there has been a step-up in competition, but it's happened over time.

[Operator Instructions] And your next question comes from the line of Anubhav Malhotra from Panmure Liberum.

I just had one more to add and again, back on the margin expectations at Primark. I mean you've given us the full year expectations probably more for a worst-case scenario where the current trends continue for the rest of the year of around 10%. Maybe you could give us more color on what's your base case scenario for Primark margins is if the initiatives that you have put in to improve the performance do actually work?

to do is make sure that we provide the estimates and on -- if we were to continue with the current performance and having the impact of markdowns, bearing in mind the expectations we have on sales. That's the guidance we're giving, but we're also saying that we are very hopeful on all the initiatives that are now being underway in Europe and are being also other initiatives that are coming into the U.K. on product, et cetera. But we haven't set a top scenario. I think what we're saying is that we're absolutely hopeful on all those initiatives as we've seen them translate into positive like-for-like in the U.K., but we acknowledge the challenges.

And the next question comes from the line of Warwick Okines from BNP Paribas.

Firstly, I just wanted to come back on your comments about the sort of balance between the top line growth and the Primark EBIT margin. I know he's not on the call, but I think it's fair to say that George has sort of generally said that he's wanted a guardrail of comfortably double-digit margins at Primark through the cycle. I'm just wondering whether the sort of success of the investment that you've had in the U.K. in terms of driving like-for-like and market share has maybe persuaded you that you can actually get a better overall result by driving top line and accepting a lower EBIT margin. And then my second question is around the actual mechanics of the markdown and how you handle that through the quarter. Could you just talk a little bit more about what you actually did? We know the impact on the gross margin, but what did you actually do? Was this all red tickets? Or does the markdown comment you make also include some of the value investments that you've been making, maybe adjusting the sort of first initial price?

Thanks, Warwick. I'll take the first one, and then I think Eoin can give some color on the markdown and the execution of the markdown. So the balance between top line growth versus EBIT, what we said is that we will focus on driving that like-for-like and top line growth and the margin will come as a consequence. I know George is not on the call, of course, as you said. What we have said in terms of margin was that we were comfortable between the 11% and 12%, but not to say that, that was the only guardrails that we would put around the margin. And what we definitely tried to put forward is that the margin is not the objective. The objective is driving top line growth. But of course, if you got growth, you will have leverage and therefore, there will be margin consequences. We are continuing to invest. Some of that investment will be phased. Some of it will be translating into medium and longer-term growth as well. And that's why we said that the priority is that investment if the initiatives are resulting into top line growth. And of course, that's what we're monitoring very closely as we are rolling those out. But again, the margin, there isn't -- we are now down to 10% or we now accept the margin at least. That's definitely not the thinking. The thinking is let's drive top line growth and with the top line growth, we will have the consequent margin. Eoin, do you want to talk about how we run through the markdowns through the quarter?

Yes, sure. Yes. And by the way, I'll just echo what you said there in terms of where the focus and priority is, which is on driving like-for-like growth. So we're not going to do anything stupid, but we -- that's where our priority is. The -- look, I don't -- I wouldn't say there's anything -- I mean, I know it's not a great markdown period of time, but I mean, we talked a little bit about the context of that already. But I don't think there's anything sort of particularly sort of different in terms of how we did the markdown through the period. The markdown we're talking about is what I'm going to call the traditional markdown. So it doesn't include any other sort of price activity that we talked about before. So as we said, obviously, cold weather product, in particular, we sort of started to mark down as we went through the period. And then with some Christmas parts of Christmas as well as been softer Christmas, obviously, that would have kind of accelerated as well. So I don't think I would say there was anything particularly sort of unusual or special about sort of our markdown activity through the year. And obviously, the scale of it was not where we wanted to be.

And if I may squeeze in -- sorry, go on Joana.

Sorry, I was just going to say, Warwick. And as Eoin alluded to Christmas, we also know that, that's what we've seen on the high street, not just with us. It just seems to have been with a difficult Christmas period, more of a markdown. So there's definitely been a phasing post Christmas on that markdown activity. Go on, you want to ask something else?

Yes, if I could squeeze another one, just to sort of end on a slightly cherry note. I know it's only one store, but can you talk a bit about the Kuwait opening and in particular, how you're pricing relative to peers in the Middle East?

Yes. Well, maybe I'll have a go at that. I mean, yes, it's going incredibly well. We -- thank you for asking a cherry good question because I mean it does remind you here that there's still quite a lot of growth available to Primark. And we've been more than happy then with the Kuwait opening. Pricing-wise, yes, we're sharp. That's -- we're -- there's different local competitors. We know exactly who they are. That's how we operate. We're all over it. And we're the best price -- we're the price leader in the market. So -- but it's been great so far. And we've got a lot of exciting stuff next week -- next year, sorry, with Dubai and a bit beyond as well. So yes, some very -- that's a very exciting frontier for us.

Dubai is quite soon, isn't it? Dubai is coming out. We've got the store in Dubai.

Dubai, end of March. Yes.

It's definitely good to have a positive note. So thank you, Warwick, for that.

We will now take our final question for today. And your final question comes from the line of Vandita Sood from Citi.

I just had a couple on food, if that's okay. So firstly, on grocery, point taken about worsening trends in the U.S.-focused businesses, but I believe that's about 15% of the mix. So for the rest of the business, especially the international brands, I think you were planning for volume growth driven by innovation. Just a quick update on that would be great. And on the Ingredients, as I understand, you were planning to reinvest some profits and hold margins flat. Now with weaker trading, are you still going ahead with those investments? Or do some of those need to be pushed back? And lastly, just a quick one on phasing in the food businesses, if you could add a bit more color on that, 1H versus 2H?

Vandita, so let me take those ones in turn. So grocery, yes, the expectations we had on the U.S. consumer and the fact that they are worse than what we had expected as that translated into the first quarter is really the reason for our decrease. Just in terms of your comment about how much the U.S. business is compared to the rest, the U.S. business from a sales point of view is around the 9%, which I quoted before. The profit is more than that. And just as a reminder, we have a joint venture as well, which is consolidated just on a profit basis. So the impact of that consumer weakness and softness on the U.S. is more marked than just on the sales line. But you are very right to point out that the international brands had quite a lot of initiatives, and we're definitely seeing some of that innovation coming through. Twinings has actually performed very well in the first quarter. And we've seen volume growth, absolutely on the back of those initiatives. We actually got more initiatives in the second half. So to your question around phasing, the first thing that I would note is in grocery, there's more -- there's a shift towards the second half with more initiatives, but also a comparator that is more favorable in the second half. In Ingredients, the investments are going ahead. Yes, we've got weakness in our U.S. consumer where actually our customers are seeing volume softness, but that doesn't stop us believing in that business. And of course, this is not about the short term, and we're hoping that, that volatile environment in the U.S. will abate at some point. Difficult to say when, but the investment proposition is very much one that we feel confident with and excited about. Did I miss something on your question? The H1, H2. So I mentioned it for grocery. Actually, it's a very good point for the food businesses because on sugar as well, where we confirm the guidance, there is a potential technical that I call it, and then I talk about hyperinflation. But in Malawi, if we do have a devaluation of the kwacha, which has been expected in the first half of our financial year, that will skew the profitability to the second half because the devaluation will take place. Hyperinflation accounting will be applied for the half year, and we will be recovering that devaluation through the pricing in the second half. So thank you for highlighting that. Yes, the food business is very much skewed towards the second half profit rather than first half. I now summarize it, it's the comparators. It is the technical accounting on Malawi, sugar and then actually the initiatives on the international brands for the second half, which are stronger.

That was our final question for today. I will now hand back to Joana for closing remarks.

Well, thank you all for joining. Bearing in mind it was unexpected, and there's a lot of announcements today. As we say, we feel very confident, well, hopeful on all those initiatives that we talked about for Primark. But we feel that at this point in time, it was right to update the guidance. So again, thank you for joining the call. I wish you all a very happy New Year, and we'll follow up with questions on a one-to-one if there are any further questions. But with that, I wish you a good day.