Associated British Foods Shares Down As Primark Sales Growth Forecast Lowered

Shares of Associated British Foods (LON: ABF) fell 1.9% on Thursday after the company lowered its 2025 sales growth forecast for Primark, citing ongoing challenges in its key UK and Irish markets.

In a trading update for the 16 weeks to 4 January 2025, ABF announced that Primark is now targeting “low-single digit” sales growth for the year, lower than its previous “mid-single digit” forecast. 

This revision reflects weaker sales in the UK and Ireland during the autumn, which offset strong performances in other regions, including the US, Spain, Portugal, and Central and Eastern Europe.

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Primark’s total sales grew 2% during the 16 weeks to 4 January 2025, with like-for-like sales down 1.9%. 

While sales in key growth markets such as the US and Europe rose—bolstered by new store openings—UK sales fell 4%, driven by subdued trading in October and November and weaker demand for cold-weather clothing during an unseasonably mild autumn.

Despite the challenges, ABF highlighted progress in Primark’s store rollout programme, including eight new stores opened globally. It also noted improvements in gross margins and effective markdown management.

Looking ahead, the company remains confident in Primark’s long-term prospects and plans to focus on product innovation, digital initiatives, and brand strength to drive growth.

Overall, ABF’s total group revenue rose up by 0.5% at constant currency, with a 2.2% decline in actual currency.

Earlier this week, both Citi and Morgan Stanley downgraded ABF shares.