Primark Slashes Sales Forecast Amid Weak Holiday Trading
London, Jan 23 (Reuters) - Associated British Foods (AB Foods) has cut its annual sales outlook for its budget fashion retailer Primark after a poor trading period in its key UK market over the Christmas quarter, reflecting the pressure on low-income shoppers.
The group said Primark now targeted "low single-digit" sales growth in 2025, having previously guided for "mid-single-digit" growth, but kept its forecast for an adjusted operating margin in line with the 11.7% achieved in 2023/24.
AB Foods shares fell 3% on Thursday, extending losses over the last year to 18%.
The group said Primark's total sales rose 2% in the 16 weeks to Jan. 4, its fiscal first quarter, helped by new store openings. However, on a like-for-like basis, sales fell 1.9%, reflecting a 6.0% drop in the UK and Ireland, a market that accounts for around 45% of its sales.
While it lost market share in the UK, sales in Europe and the United States were stronger.
The group said the comparable sales growth in the UK and Ireland over the key Christmas weeks was more than offset by weaker autumn trading amid "a challenging retail backdrop."
Official data published on Friday showed UK retail sales fell unexpectedly in December, highlighting the persistence of the cost-of-living crisis and raising the risk of an economic contraction in the fourth quarter.
(Reporting by James Davey; Editing by Paul Sandle, Tomasz Janowski and Jan Harvey)