Companies

UK & Ireland remains a weak spot for Primark

May 5, 2025 United Kingdom

Associated British Foods, owner of Primark, has released its trading update for the first half of its fiscal year. Primark’s sales grew in the period, despite weaker results in the UK & Ireland market

“Primark delivered good growth in Europe and the US, with continued consumer caution in the UK. Primark’s profit and margin delivery was strong, and our low-cost operating model is working well. Our focus remains on sharp execution of our key growth initiatives across product, brand, digital and new market entry”, commented George Weston, CEO of Associated British Foods.

First Half Results

In the six weeks to the 1^stof March 2025, Primark’s revenue increased by 1% on a constant currency basis to 4.47 billion British pounds (5.25 billion euros), as compared to the same period of the last fiscal year. While the US, Spain, Portugal, France, Italy, and Central and Eastern Europe markets delivered growth, the UK & Ireland remains a weak spot for the retailer.

In particular, sales in the UK and Ireland decreased by 4%, on a comparable basis to the first half of last year, as the UK clothing retail market declined during the period, reflecting cautious consumer sentiment and a lack of seasonal push in the autumn months due to mild weather. This market accounted for 46% of total revenue.

On the contrary, driven by new store openings, Primark’s sales grew by 8% in Portugal and Spain, 4% in France and Spain and 21% in Central and Eastern Europe, as compared to the same period of the prior year. In the Northern European markets, sales increased by 1% over the prior year and by 2.4% on a like-for-like basis.

In the US, the fashion retailer’s sales increased by 17%, as compared to the same period last year, with recent store openings contributing positively to the overall sales density in the US. At the end of the period, 29 stores were operating in the market, and 18 leases had been signed.

In the first half of fiscal 2025, Primark’s adjusted operating profit rose by 8% year-over-year to 540 million British pounds (634.1 million euros), with the adjusted operating profit margin increasing to 12.1% from 11.3%, “reflecting strong operating model”.

Outlook

For the full year, the fashion retailer continues to target low-single-digit sales growth. “This will be driven by our store rollout programme in our growth markets in Europe and the US, which is on track to contribute around 4% to total Primark sales growth, offset by weaker sales in the UK and Ireland”.

Primark also expects the adjusted operating profit margin to be broadly in line with last year, reflecting an improvement in the gross margin and good cost management, offsetting wage inflation and an increase in investment.

1 GBP = 1.17 EUR

Image Credits: corporate.primark.com

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