Primark cuts outlook following disappointing UK and Ireland sales

Associated British Foods (ABF), the owner of Primark, has cut its outlook for the budget retail chain as like-for-like sales in the UK and Ireland dropped 6 percent, while overall sales fell 4 percent, due to a general decline in the region’s clothing market and cautious consumer sentiment.

For the first quarter, spanning the 16 weeks to 4 January, 2025, ABF’s Retail division reported sales of 3.36 billion pounds, a decrease of 0.4 percent at an actual currency, yet an increase of 1.9 percent at constant currency, in comparison to the same period in the year prior.

Overall, Primark sales rose 2 percent, with growth seen across Spain, Portugal, France, Italy, Central and Eastern Europe and the US. In each of these regions, new stores were deemed notable contributors to sales jumps, particularly in the US, where sales grew 17 percent.

ABF said for womenswear, performance was impacted by “weaker sales in cold weather and seasonal clothing”, however, leisure and nightwear welcomed stronger sales. Menswear and knitwear both grew over the period, while Primark’s Christmas product range “traded well”.

In the UK, Primark’s market share decreased slightly to 6.8 percent, as its trading pattern over the cited period was marked by a weak October and November. This was marginally offset by stronger sales and like-for-like growth in December over the Christmas trading weeks.

As a result of the weak performance, however, Primark is now targeting low-single digit sales growth in 2025, which ABF said would be driven by a store rollout programme in growth markets in Europe and the US, which are on track to contribute around 4 percent to total Primark sales growth, offset by weaker LFL sales in the UK and Ireland.

The retailer is continuing to anticipate that its adjusted opening profit margin will remain broadly in line with last year’s level, while gross margins have continued to improve.

ABF added: “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 drive underlying growth.”