Inghams Group's Cost Shock Masks a Genuine Turnaround Underway

A weak result driven by transient input cost pressures obscured improving volumes and pricing, as a new CEO's efficiency drive and resilient chicken demand support the recovery case.

22 Jun 2026 · 2 min read

Inghams Group fell 17 percent in March after a weak first-half result showed underlying EBITDA down 35 percent and group margin compressing sharply, but fund managers who met with new management came away reassured that transient cost pressures, rather than structural decline, were behind the miss, with the stock recovering as demand for cheap chicken protein stayed strong.

A weak result softened by management access

First Samuel said Inghams' first-half FY26 result was weak on the key operating profit line, with underlying EBITDA falling 35 percent to $80.6 million from $124 million a year earlier, and group margin compressing to 5.0 percent from 7.7 percent, sending the stock down 17 percent for the month, prompting the fund to reduce its position size at higher levels. Its disappointment was somewhat assuaged by a meeting with chief executive Edward Alexander and chief financial officer Gary Mallett, who convinced First Samuel the drivers of the cost increases are well understood and likely to be transient.

Underlying EBITDA fell 35% to $80.6 million, from $124 million in 1H25, with group margin compressing to 5.0% from 7.7%. The drivers of cost increases are readily understood and likely to be transient.

— First Samuel, Article, March 2026

Confidence reinforced despite a war-related cost shock

First Samuel said its team attended Inghams' investor day in Sydney, catching up with chief executive Edward Alexander and senior management, reinforcing confidence in the value of the underlying asset, with FY26 EBITDA guidance of $180 million to $200 million maintained despite a Middle East-related fuel and input cost shock. Excluding that war-related pressure, the underlying trading trend appeared better than the headline result suggested, with volumes and net selling prices both growing.

FY26 EBITDA guidance of $180-200m pre AASB 16 was maintained despite the Middle East-related fuel and input cost shock. Excluding that war-related pressure, the underlying trading trend appears better than the headline suggests.

— First Samuel, Article, May 2026

A beaten-down stock with real turnaround momentum

ClearBridge Investments described Inghams as one of those heavily beaten-down stocks, having lost a Woolworths contract, changed CEOs, and run into productivity and cost issues the prior year. It said the new chief executive came from Inghams' New Zealand operations with a strong track record of driving efficiency and productivity, in a business where demand for chicken remains strong as one of the cheapest protein sources during a cost-of-living crisis, with volume growth accelerating and the company winning new contracts in what is effectively a two-player market.

What fund managers say they are watching next is whether the new chief executive's efficiency track record from New Zealand translates to Australian operations, continued new contract wins to offset the lost Woolworths business, delivery on the $180 million to $200 million FY26 EBITDA guidance once war-related cost shocks ease, and whether chicken's position as a cheap protein source keeps driving volume growth.