2025-01-23 14:01:00 :
Associated British Foods Plc has cut its forecast for sales growth at its Primark discount fashion retailer, blaming weak British consumer confidence.
The British conglomerate, which also owns sugar, agriculture and ingredients businesses, said on Thursday the retailer was now targeting low-single-digit growth this year. AB Foods had previously forecast mid-single-digit sales growth.
Primark’s year-on-year sales in the UK fell 6.4% in the 16 weeks to January 4, a period that includes the key holiday season. AB Food expects Primark’s full-year adjusted operating margin to remain unchanged as it controls costs.
AB Foods shares fell 1.9% in early London trading, extending their losses over the past 12 months to 18%.
The results add to the gloom hanging over retailers, who face costs ranging from rising wages to an increase in employers’ national insurance contributions (payroll tax) in the UK government’s revenue-boosting budget.
Labor’s warnings about the state of public finances and the long time it will take to rebuild services have eroded consumer confidence. Nearly half of respondents to the latest British Retail Consortium survey said they expected the economy to get worse over the next three months.
AB Foods CEO George Weston has previously said the tax changes will cost the business tens of millions of dollars.
“The combination of deterioration in core UK business and heavy investment in big box stores in the US has not Provide a favorable context for valuation.”
AB Foods said that at constant exchange rates, the group’s revenue during the period increased by 0.5% to 6.7 billion pounds. Almost half are from Primark.
Sugar sales fell 2%, with lower European sugar pricing having the expected impact on the company.
This article was generated from automated news agency feeds without modifications to the text.
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