- FTSE Retailers issued two profit warnings during Q3 2026, down from five in the same period last year
- The year-to-date retail profit warning total is 10, down slightly from 11 at the same stage of 2025 and the lowest year-to-date total since 2013 (8)
- Listed Consumer Discretionary companies issued 21 profit warnings in Q3, one fewer than in Q2, making it the most affected FTSE super-sector
- Across the UK, listed businesses issued 65 profit warnings in Q3, the highest quarterly total since Q4 2024 (71), with policy change and geopolitical uncertainty remaining the leading driver
London, FTSE Retailers issued two profit warnings in the third quarter of 2026, down from five in same period in 2025, according to EY-Parthenon’s latest Profit Warnings report.
It brings the year-to-date total for listed retailers to 10 profit warnings, compared with 11 at the same stage of 2025, and marks the lowest year-to-date total for the sector since 2013 (8).
While retail profit warning numbers remained low during Q3, the broader Consumer Discretionary super-sector, which includes household electronics, leisure items, luxury products and other non-essential goods and services, continued to record the highest number of profit warnings of any FTSE super-sector.
Companies in the sector issued 21 warnings during the third quarter, one fewer than the 22 recorded in Q2. Within the Consumer Discretionary super sector, the FTSE Household Goods and Home Construction sub-sectors remained the most affected, issuing eight profit warnings during the quarter, including six from listed housebuilders.
Silvia Rindone, EY-Parthenon UK&I Retail Lead, said: “The retail sector’s low level of profit warnings may appear surprising given the range of pressures businesses continue to face. Retailers are contending with rising employment costs, higher financing costs, and continued pressure on household budgets, yet warning numbers remain close to historic lows.
“Part of the reason is resilient consumer spending. Retail sales volumes have continued to improve and are broadly back to pre-pandemic levels, but another important factor is the way the sector has adapted over recent years. Many retailers have invested heavily in value, convenience, customer experience and operational execution, which has helped them navigate a challenging trading environment more effectively.
“That said, low warning volumes should not be mistaken for an absence of risk. We continue to see distress among businesses that lack the capital, flexibility or management capability to adapt. At the same time, many retailers are relying on promotional activity to maintain volumes, while facing growing pressure from wages, energy, logistics and business rates costs.
“The key question is whether consumer spending can remain resilient as households face renewed cost-of-living pressures and broader economic uncertainty. Forward-looking indicators, including retailers’ expectations for sales, hiring and investment, suggest retailers are becoming more cautious ahead of the final quarter and the crucial Black Friday and Christmas trading periods. As ever in retail, businesses that continue to improve and differentiate their proposition are likely to be best placed to succeed.”
Broader market backdrop remains challenging
Across all sectors, UK-listed companies issued 65 warnings during Q3, up from 59 in the previous quarter and the highest quarterly total since Q4 2024.
Rising costs were cited as a leading factor in more than a third (35%) of Q3 warnings – the highest proportion recorded for this cause since Q4 2022 (41%). The leading driver of profit warnings in Q3, for the sixth consecutive quarter, was policy change and geopolitical uncertainty (54%), the highest quarterly proportion to reference this reason in more than 25 years of EY’s analysis. Two in five warnings (38%) during the third quarter specifically cited the impact of the conflict in the Middle East.
The report identified contract and order cancellations or delays (38%) and weaker consumer confidence (20%) as the other main drivers behind Q3 warnings. Nearly a fifth (17%) of all UK-listed businesses have issued at least one profit warning in the last 12 months.
Jo Robinson, EY-Parthenon Partner and UK&I Financial Restructuring Leader, added: “The latest figures show the variety of structural changes and challenges that companies are currently navigating. This is not a conventional economic cycle. For much of the post-war period, the economy followed a familiar demand-led boom-and-bust pattern but, since the pandemic, supply-side disruption including material and labour shortages, energy shocks, tariffs and wider geopolitical disruption has become far more significant. Companies are also facing existential questions about their business models, as consumer behaviour evolves and AI reshapes competitive positions and routes to market.
“With the Autumn Budget around the corner, profit warnings linked to policy change and uncertainty – once concentrated around fiscal events or elections – have become a regular feature of our data. Businesses have shown considerable resilience, but the pace of policy change is making forecasting, investment and capital allocation much harder. In today’s fiscal and financing environment, where many earnings pressures are linked to external shocks or competitive and technological disruption, boards that act early instead of waiting for conditions to improve will retain more options.”