Primark, Marks & Spencer See Fashion, Beauty Sales Shrink During Key Holiday Trading Period

Core Insights - The luxury market is recovering, but the high street is suffering due to declining consumer confidence, particularly in the U.K. and Europe [1] Company Performance - Associated British Foods (ABF) has warned that Primark's adjusted operating profit and earnings per share for the fiscal year 2025-26 are expected to be below last year's figures, primarily due to under-performance [2] - Primark's sales growth for the 16 weeks ending January 3 was below expectations, with anticipated sales growth in the first half of 2026 projected to be in the low single digits [3] - In the U.K., Primark achieved approximately 3 percent sales growth, with like-for-like sales increasing by 1.7 percent despite a challenging clothing market [5] - In continental Europe, like-for-like sales declined by around 5.7 percent, indicating weak consumer confidence [5] - Overall, Primark's sales rose by 1 percent in the 16 weeks, but like-for-like sales were down by 2.7 percent [6] Market Environment - The retail environment in the U.S. is described as volatile, affecting consumer sentiment and foot traffic [5] - Primark has significantly increased markdowns to manage inventory levels, which has negatively impacted profitability [3] - The company continues its store roll-out program, contributing approximately 4 percent to sales growth, including the opening of its first store in Kuwait through a franchise model [5]