Penneys parent adjusts guidance after weaker Christmas trading [Video]

The parent company of Penneys has cut its sales guidance for the budget fashion retailer after seeing weak trading in the UK over Christmas due to what it described as pressure on lower-income shoppers.

Associated British Foods (ABF) said Penneys, which trades as Primark outside Ireland, would target low-single-digit sales growth in 2025, as opposed to the mid-single-digit growth forecast previously.

ABF retained its forecast for an adjusted operating margin of 11.7% in line with the 2023/24 financial years, but shares in the company have fallen 3.2% today and nearly 18% over the past year.

The group said that total sales at Primark increased 2% in the 16 weeks to 4 January, representing its first fiscal quarter, due to new store openings.

On a like-for-like basis, sales fell 1.9%, reflecting a 6% drop in the UK and Ireland, which accounts for nearly half of its sales, but while the group lost market share in the UK, sales improved in …