First-Half Profits Plunge Amid Revenue Stagnation (Image Credits: Pixabay)
Australia – Poultry giant Inghams Group lowered its full-year earnings outlook following a steep profit decline in the first half of fiscal 2026.[1][2]
First-Half Profits Plunge Amid Revenue Stagnation
Net profit after tax for the period tumbled nearly 65% to A$18.1 million. Revenue held steady at A$1.61 billion, but underlying earnings fell almost 34% to A$139.2 million. Pre-AASB 16 underlying EBITDA dropped 35% to A$80.6 million.[1]
These figures marked a challenging start to the year for the company, which produces items like chicken nuggets and turkey mince. The results reflected ongoing pressures from the prior fiscal year, where full-year net profit had already declined 11.5% to A$89.3 million on revenue of A$3.15 billion.[1]
Guidance Slashed Due to Delayed Improvements
Inghams previously guided for pre-AASB 16 underlying EBITDA of A$215 million to A$230 million for fiscal 2026. The company now expects underlying earnings between A$180 million and A$200 million, equivalent to $127 million to $141 million.[1]
Several factors drove the revision. Operational enhancements took longer than expected, with benefits now skewed toward the fourth quarter. New Zealand operations remained flat, while excess inventory, supply chain shifts, and customer onboarding added costs. An operational reset followed customer changes from fiscal 2025.[1]
- Timing delays in realizing operational gains
- Flat performance in New Zealand
- Elevated costs from surplus stock
- Supply chain transition expenses
- Customer-related operational adjustments
CEO Highlights Path to Recovery
Chief Executive Ed Alexander described the first-half pre-AASB 16 earnings of A$80.6 million as disappointing. He pointed to excess inventory management and supply chain inefficiencies during the fiscal 2025 customer reset as key impacts.[1]
Alexander noted positives, including a return to volume growth in the second quarter and price increases in Australia and New Zealand amid stronger wholesale fundamentals. Inventory reductions supported normalized production and better efficiency heading into the third quarter. “With improved inventory levels and momentum returning across the core business, earnings are expected to improve through the second half and into FY27,” he stated.[1]
The revised guidance still signals an uplift from the first-half outcome, underscoring potential for a stronger back half.
Shares Tumble on News
Investors reacted sharply to the announcement. Inghams shares closed down 13.52% in Australia, reflecting concerns over the profit miss and lowered outlook.[1][3]
| Metric | FY26 H1 | Prior FY Full Year |
|---|---|---|
| Net Profit (A$m) | 18.1 (-65%) | 89.3 (-11.5%) |
| Revenue (A$b) | 1.61 (flat) | 3.15 (-3.4%) |
| Underlying EBITDA pre-AASB 16 (A$m) | 80.6 (-35%) | 392.2 (-15%) |
This drop came despite earlier reassurances from the company, which in October refuted speculation about a potential sale.Just Food
Key Takeaways
- Inghams reduced FY26 earnings guidance to A$180m–A$200m from A$215m–A$230m.
- First-half profit fell 65% due to inventory and supply chain issues.
- Leadership sees earnings recovery in H2 FY26 and beyond.
Inghams faces near-term headwinds but positions itself for improvement through efficiency gains and market stabilization. The poultry sector’s resilience will be tested as the company navigates these challenges. What steps should Inghams prioritize for a stronger recovery? Share your thoughts in the comments.
