UK's Primark sales rise 1% to $12.35 bn, fuelling ABF's resilient FY25

In the UK, like-for-like sales in the retail segment improved in the second half (H2), reflecting a sharpened focus on Primark’s core value proposition and product assortment. Europe saw a robust first half followed by softer trading later in the year.

The adjusted operating profit for retail segment increased 2 per cent to £1.1 billion (~$1.43 billion), with an operating margin of 11.9 per cent. The company ramped up investment in digital capability, brand marketing, and product innovation to support long-term growth. Primark’s online and in-store integration continued to evolve, enhancing its customer engagement and omnichannel presence, ABF said in a press release.

Looking ahead to 2026, Primark expects subdued consumer demand but aims to boost like-for-like sales through strengthened product value, pricing perception, and digital engagement. Its store expansion programme—covering Europe, the US, and franchise markets—is projected to add around 4 per cent to sales growth, while white-space expansion is targeted to contribute 4–5 per cent annually.

Meanwhile, ABF recorded consolidated revenue of £19.46 billion (~$25.3 billion) in FY25, down 3 per cent YoY (–1 per cent in constant currency) and adjusted operating profit of £1.73 billion (–13 per cent). Adjusted profit before tax fell to £1.70 billion, and adjusted earnings per share (EPS) declined 11 per cent to 174.9 pence (p).

Despite the downturn, ABF has maintained a robust financial footing, with net cash before lease liabilities at £390 million and a leverage ratio of just 1x. The group has generated £648 million in free cash flow and invested £1.24 billion across operations.

ABF maintained its total dividend at 63p per share—comprising an interim dividend of 20.7p and a proposed final dividend of 42.3p—while completing £594 million of share buybacks in FY25. A further £250 million (~$325 million) buyback programme is planned for completion before the end of FY26.

“This was a year of intense strategic and operational activity within ABF. Primark’s improved UK trading in the second half was encouraging and reflects renewed focus on our value proposition and enhanced digital capabilities. While we have more to do in some European markets, significant white space remains for expansion across new and existing territories,” said George Weston, chief executive at Associated British Foods.

“As a Board, we have regularly looked at the structure of the group to assess how best to develop our strong Food and Primark businesses. ABF has delivered good long-term returns for shareholders in its current structure and been a supportive home for both Primark and our Food businesses,” said Michael McLintock, chairman of Associated British Foods.

“Given the scale that Primark has now attained and the need for better understanding of our Food businesses, the Board has been undertaking an in-depth review of the future shape of ABF to assess whether a separation of the Primark and Food businesses would be a better structure in the years ahead. This review is in consultation with Wittington as ABF’s largest shareholder, and we look forward to discussing the review further with all of our stakeholders. I am leading the review and will update the market further when we are able to provide more detail,” added McLintock.

For FY26, ABF expects growth in adjusted operating profit and EPS, supported by continued investment in digital transformation and store expansion. Primark’s adjusted operating profit margin is expected to be slightly below last year’s underlying level, given higher investment outlays and the absence of a one-off £20 million benefit recorded in FY25.

Despite ongoing economic uncertainty, ABF remains confident in its medium- and long-term growth prospects, backed by a strong balance sheet and its dual focus on expanding Primark’s international footprint, added the release.

ALCHEMPro News Desk (SG)