Retailers on the Financial Times Stock Exchange (FTSE) issued five profit warnings during the second quarter (Q2) of 2026, an increase from three in Q1, according to the latest ‘Profit Warnings’ report from EY-Parthenon.
This marks only the third time since 2007 that the retail sector has recorded more warnings in the second quarter than the first.
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All five warnings issued by retailers in the quarter cited the Middle East conflict as a contributing factor, underlining how vulnerable the sector remains to disruption originating beyond UK borders.
Across the first half of 2026 overall, FTSE retailers issued eight profit warnings in total, two more than the six recorded over the equivalent period last year.
The report attributes ongoing pressure on the sector to a combination of rising costs, weaker consumer confidence and tightening margins, even as sales volumes have begun to show signs of recovery.
More broadly, UK-listed companies across all sectors issued 59 profit warnings in the second quarter, a slight rise from 55 in the first quarter.
Policy shifts and geopolitical instability were identified as a key driver behind 53% of these warnings, the highest proportion attributed to this factor in more than 25 years of the report’s history.
By sector, travel and leisure recorded the highest number of profit warnings in the second quarter, with seven, its highest quarterly total since the third quarter of 2022, when nine were recorded.
Home construction followed with six warnings while software and computer services, industrial support services, and retail each logged five.
The industrial support services category covers providers of business services, industrial supplies and recruitment.
The report also notes that 18% of all UK-listed companies, nearly one in five, have issued at least one profit warning in the past year.
This suggests that while the overall number of warnings appears to be stabilising, financial pressure across corporate Britain has not eased substantially.
EY-Parthenon UK and Ireland retail lead Silvia Rindone said: “Looking ahead, the outlook for the second half of the year is finely balanced.
“Supportive factors such as seasonal demand and policy developments may provide some uplift, but ongoing cost pressures, cautious consumers and geopolitical uncertainty mean execution will be critical in determining which retailers outperform and which continue to face challenges.”
The FTSE 100 Index is the main UK stock market index and tracks the 100 largest companies listed on the London Stock Exchange by market capitalisation.
