Primark sees mixed momentum as UK growth offsets European slowdown
Associated British Foods shared its Golden Quarter update and described the 16 weeks to 3 January as a tough stretch for Primark. The retailer expects revenue to be up by about 4%, or 1% when currency effects are removed.
The UK played a key role in that improvement. Primark posted around 3% sales growth in its home market, with like-for-like growth of roughly 1.7%. The company said the rise came from steps taken to strengthen the brand’s value offer — better product ranges, stronger price perception, and more digital engagement, including the growing Click & Collect service. Womenswear delivered especially strong results.
Since the UK and Ireland make up about 45% of Primark’s business, this progress is significant.
The picture looked weaker across continental Europe, which is a slightly larger part of the business at 49%. Like-for-like sales there fell by around 5.7% as consumer confidence stayed low and Primark’s new initiatives are only just getting started across the region.
The US, which represents 6% of the total business, remained unpredictable. Shifts in sentiment and footfall created an uneven retail environment, though sales still grew at a double-digit pace thanks to continuing expansion. Store openings across markets added roughly 4% to overall growth, including Primark’s first franchise location in Kuwait.
Overall sales for the quarter came in lower than Primark expected, and the company now anticipates low single-digit growth for the first half of the year. Profit is also under pressure due to higher markdowns used to keep inventory at healthy levels.
Primark has several initiatives lined up for the coming months aimed at lifting sales and improving performance, especially in Europe. Even so, profit margins are expected to stay around 10% for the full year, similar to the first half. Last year’s first half included a one-off £20 million benefit that will not repeat.
ABF CEO George Weston described the trading period as mixed, noting solid progress in the UK and ongoing weakness in Europe. He emphasized that the company is working on areas it can directly influence, particularly the programmes being rolled out across European markets. He also pointed out that Primark is moving forward with its longer-term growth plans.
