Associated British Foods PLC (ASBFY.PK, ABF.L) announced on Thursday a decrease in its 16-week Group revenue by 2.2% compared to last year, totaling £6.732 billion. This decline was observed across all segments. However, when calculated on a constant currency basis, the revenue showed a slight increase of 0.5%.
Looking forward, Primark has adjusted its sales growth target for 2025 to a low-single digit increase, a revision from the previously anticipated mid-single digit growth.
Despite challenging market conditions in the UK and Ireland, the company expressed continued confidence in Primark's business model. It remains focused on initiatives involving product development, digital enhancements, and brand improvement to foster underlying growth. Primark expects its adjusted operating profit margin to remain largely consistent with last year’s figures, attributing the stability to improved gross margins and effective cost management, which counterbalance inflation and increased investment.
In its trading update for the 16-week period ending January 4, Primark's retail sales decreased by 0.4% year-over-year to £3.36 billion; nonetheless, there was a 2% growth in constant currency sales.
Sales in the UK and Ireland, which represent about 45% of Primark's total sales, saw a decline over the period. This was despite like-for-like sales growth during the crucial Christmas period, as it was overshadowed by weaker autumn trade within a challenging retail landscape.
Conversely, retail sales experienced improvement in key growth regions such as Spain, Portugal, France, Italy, Central and Eastern Europe, and the United States.
In the Grocery segment, revenue declined by 1.8% to £1.39 billion on a reported basis, though it increased by 0.8% at constant currency rates, primarily due to robust performance in international brand businesses like Twinings and Ovaltine.
At constant currency rates, the Ingredients segment saw a 4% revenue increase, whereas the Sugar segment experienced a 2% decrease, and Agriculture revenue fell by 4%.
The company plans to release its interim results for the 24 weeks ending March 1 on April 29.
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