Associated British Foods (ABF), the owner of Primark, has revised down its outlook for the Irish clothing discounter. The reason for this is a six percent decline in comparable sales in Great Britain and Ireland. Total sales fell by four percent, reflecting a general decline in the region’s clothing market and cautious consumer sentiment.
However, in the first quarter, which covers the 16 weeks ended January 4, 2025, ABF’s retail division recorded sales of 3.36 billion pounds (3.97 billion euros), down 0.4 percent in actual currency terms an increase of 1.9 percent in constant currency compared to the same period last year.
Overall, Primark’s sales increased by two percent, with growth primarily achieved in Spain, Portugal, France, Italy, Central and Eastern Europe and the USA. In all of these regions, new store openings were highlighted as key sales drivers, particularly in the US, where sales increased 17 percent.
ABF said womenswear performance was impacted by “weaker sales of cold-weather and seasonal wear,” while casual and sleepwear posted stronger sales. Menswear and knitwear recorded growth in the period and Primark’s Christmas range performed “well”.
In Great Britain, Primark’s market share fell slightly to 6.8 percent as trading activity was characterized by a weak October and November. However, this was partially offset by stronger sales and like-for-like growth in December during the Christmas trading weeks.
Due to the weak performance, Primark is now targeting low single-digit sales growth for 2025. According to ABF, this will be achieved through a store opening program in growth markets in Europe and the US, which is expected to contribute around 4 percent of overall Primark sales growth. However, this increase is likely to be offset by weaker like-for-like sales in the UK and Ireland.
The retailer continues to expect its adjusted operating profit margin to remain broadly in line with last year, while gross margins have continued to improve.
ABF added: “Despite the market conditions in the UK and Ireland, we remain committed to the Primark concept and remain focused on initiatives across product, digital and driving underlying growth.”
This article previously appeared on Fashionunited.uk and was created using digital tools translated.
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