Associated British Foods downgraded the annual sales guidance for its Primark budget clothing business after disappointing results in the Christmas quarter in its main UK and Ireland market.
The group said it was now targeting 'low-single digit' sales growth in 2025 for Primark, having previously forecast 'mid single digit' growth.
It kept its forecast for an adjusted operating margin in line with the 11.7% Primark achieved in 2023/24.
The group said Primark's total sales grew 2% over the 16 weeks to 4 January, its fiscal first quarter, helped by new store openings.
However, on a like-for-like basis they fell 1.9%, reflecting a 6.0% dip in the UK and Ireland - a market that accounts for about 45% of its sales.
Shares in the company opened down 2% but then pared losses to trade flat at 1,933 pence.
The group said growth in UK and Ireland like-for-like sales over the key Christmas trading weeks was more than offset by weaker autumn trading in a challenging retail environment.
'Cautious Consumer Sentiment'
'Trading activity within elements of our shopper base was weak as a result of cautious consumer sentiment and a lack of seasonal purchasing catalyst given the mild autumn weather,' it said.
Earlier this month, other retailers skewed towards lower income consumers – sportswear group JD Sports, general merchandise business Argos, bakery chain Greggs and discounter Poundland – all reported weak Christmas trading.
In contrast, clothing retailers Next and Marks & Spencer reported upbeat trading. However, Next did highlight relative weakness in stores compared with online results.
Unlike its rivals, Primark does not offer online delivery. It does, however, offer a click and collect service.
AB Foods, whose shares have fallen 14% over the last year, maintained its guidance for its grocery, sugar, agriculture and ingredients businesses.
Revenue in its grocery business, which includes brands such as Twinings tea, Jordans cereals, Kingsmill bread and Ovaltine drinks, grew 1% in the first quarter. Sugar sales declined 2%.
