Primark’s Christmas Quarter Sales Fell 2.7%

Associated British Foods, which warned on profit earlier this month, confirmed on Thursday that underlying sales at its Primark clothing business fell 2.7 percent in the Christmas quarter.

When AB Foods issued its profit warning on January 8, it published sales estimates for the 16 weeks to January 3. Final figures were published on Thursday.

The warning, which sent AB Foods’ shares down 14 percent, was due to weaker-than-expected Primark sales and subdued demand in the United States for its cooking oils and bakery ingredients.

It cast a shadow over the group’s plans to separate Primark from its food business - which includes grocery brands such as Ovaltine, Ryvita and Twinings, as well as major sugar, agriculture and ingredients units.

The group said in November it was conducting a review of its structure and hoped to decide by April 21 when first-half results are reported. However, CEO George Weston said the “working assumption” was a separation would happen.

Thursday’s update made some adjustments from the January 8 statement.

Total retail revenue was up 4.2 percent over the 16 weeks versus a previous estimate of up 4 percent, sugar revenue was down 4.3 percent versus a previous estimate of down 2 percent, ingredients revenue was down 2.9 percent, versus a previous estimate of down 3 percent, and agriculture revenue was down 4.1 percent versus a previous estimate of down 4 percent.

Grocery revenue was flat, confirming the previous estimate.

By James Davey

Learn more:

Primark Sales Slow as Demand Drops

The slowdown contributed to owner AB Foods warning that its annual profit would fall as shoppers in the US and Europe tighten spending.