Primark cuts sales outlook after weaker performance in UK
Associated British Foods (ABF) has cut its full year sales forecast for Primark after the fashion retailer posted a decline in sales in the UK in the 16 weeks to 4 January.
In a trading statement, ABF said Primark’s sales fell by 4% and by 6.4% on a like-for-like basis. Its market share was also down slightly at 6.8%.
ABF said the retailer was impacted by cautious consumer sentiment in the period and reduced seasonal purchasing due the UK’s mild autumn weather.
Although trading was weak October and November, there were stronger sales in December across the peak festive trading weeks.
Subscribe to TRBDuring the period, Primark opened one new store, relocated one store and right-sized one store in the UK. It also made further progress with the rollout of its Click & Collect service, which is now offered in 113 stores.
Primark is now targeting low-single digit sales growth in 2025, down from a previous mid-single digits forecast given in November. This will be driven by the retailer’s store rollout programme in growth markets in Europe and the US.
Looking ahead, ABF said: “Despite the market conditions in the UK and Ireland, we remain confident in the Primark proposition and continue to focus on initiatives across product, digital and brand to drive underlying growth.
“We continue to expect Primark’s adjusted operating profit margin to remain broadly in line with last year’s level, as gross margins have continued to improve and good cost management offsets inflation and the step-up in investment.”
