Primark H1 sales marginally grow as store roll out continues, offset by weaker UK market

Sales for Primark saw impact from cautious consumer sentiment in the UK for the 24 weeks to March 1, yet in other regions “good underlying growth” was largely reported by the budget retailer’s parent company, Associated British Foods (ABF).

Central and Eastern Europe welcomed the highest growth in sales at 21 percent, as the company continued to roll out new stores in the region. This was also the case for the US, where a sales growth of 17 percent was reported. Sales in Spain and Portugal rose 8 percent, offset by flooding the Valencia region, which led to store disruption, while in France and Italy sales rose 4 percent.

In Northern Europe, strong growth in Germany and Netherlands helped drive a 2.4 percent uptick, reflecting a restructuring strategy among Primark’s retail network that the company said had improved sales densities and profitability.

US and European store roll out boosts growth

This contrasted a 4 percent decline in sales for the UK and Ireland, where “cautious consumer sentiment and a lack of seasonal purchasing in the autumn months due to mild weather” took precedence. Primark further stated that during the half year period, its market share reduced from 6.9 percent to 6.7 percent in the two regions due to weak shopping activity within “elements” of its customer base.

Overall, Primark’s sales during the half year grew 1 percent compared to the same period in the year prior, with new store rollouts contributing 4 percent to total sales growth. These, in turn, impacted like-for-like sales, which fell 2.5 percent.

Adjusted operating profit for the retailer grew 8 percent, while its operating margin rose to 12.1 percent, “demonstrating the strength of Primark’s operating model”. The company said the growth in its gross margin was “primarily due to favourable foreign exchange, supplier efficiencies and the effective management of markdowns”. Further cost management and phasing one-off items also offset wage inflation and increased investment in certain initiatives.

US tariff impact expected for H2, but outlook remains unchanged

Looking ahead, ABF’s chief executive officer, George Weston, said that while the company was facing “an operating environment with significant uncertainties”, the group “remains well positioned and our strong balance sheet enables continued investment to deliver long-term sustainable growth”. As such, ABF’s outlook for the financial year has remained unchanged–with the exception of its Sugar division–while still considering “the absorption of a US tariff impact in H2 2025, based on what we know today”.

Primark is currently targeting low-single digit sales growth for the full year, driven by its store roll out plan across Europe and the US, which the company stated is on track to contribute 4 percent to total Primark sales growth. Weaker sales in the UK and Ireland, where trading is anticipated to remain challenging into the second half of the year, is expected to offset sales growth.

The retailer also continues to forecast an adjusted operating profit margin in 2025 broadly in line with last year’s level, reflecting an improvement in gross margin and cost management. Its adjusted operating margin, meanwhile, is expected to be lower than the first half of the year due to the phasing of one-off items which benefited H1 results.