Primark owner blames Christmas sales slump on 'difficult clothing market'
Primark suffered weaker sales over the key Christmas period amid a 'difficult clothing market', its owner has confirmed.Associated British Foods said sales had slowed at the budget clothing retailer in the 16 weeks to 3 January.In a surprise statement earlier this month, it issued a profit warning following weaker European sales at Primark and challenges in its US food business.ABF said group sales were down 0.9 per cent, compared to its original estimate of 1 per cent.It revised its grocery sales downwards, from growth of 1 per cent to 0.7 per cent in line with expectations while Primark sales saw marginal improvement from initial estimates, from 1 per cent to 1.5 per cent. Primark reported weaker sales driven by a slowdown in Europe Shares in ABF jumped 0.97 per cent but the prognosis for Primark is still bleak. Earlier this month, it said it had suffered in 'difficult clothing market, particularly over Christmas'.While Primark has grown its market share in the UK, consumer confidence in Europe slipped with like-for-sales growth plummeting 5.7 per cent. Its roll-out in the US has also proved difficult amid a 'volatile' environment.It expects sales growth in the first half of 2026 to be in the low single digits with profits lower after a 'challenging start to the year'.ABF has previously indicated it may choose to spin off Primark and its food business, but majority shareholder Wittington has committed to 'maintaining majority ownership' of both businesses.Its food business is also struggling amid weakened consumer demand, with its sugar business suffering a 6.9 per cent drop in revenue, revised down from its initial estimate of 5 per cent. Sales at its ingredients business are down 2.1 per cent.Adam Vettese, market analyst for eToro, said: 'Associated British Foods' trading update today confirms the weakness indicated in the profit warning earlier this month.'Guidance remains cautious, with full year adjusted operating profit and earnings per share lagging last year due to US consumer weakness and Primark pressures.'Overall, ABFs diversified model can help the company navigate difficult periods through resilient store expansion and balance sheet strength, but the earnings reset tempers enthusiasm. 'At current levels, patient investors will hold tight, betting on Primark's long-term rollout and consumer recovery, further upside will also be macro dependent.'AJ BellAJ BellEasy investing and ready-made portfoliosHargreaves LansdownHargreaves LansdownFree fund dealing and investment ideasinteractive investorinteractive investorFlat-fee investing from £4.99 per monthFreetradeFreetradeInvesting Isa now free on basic planTrading 212Trading 212Free share dealing and no account feeAffiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.Compare the best investing account for you
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Primark owner blames Christmas sales slump on 'difficult clothing market'
