Primark: disappointing 2026 forecasts weigh on parent company Ab Foods. The share price is attempting a recovery today

Primark’s sales have seen a slight increase this year. Estimates from the AB Foods group for its fast-fashion subsidiary indicate a 2 per cent rise in sales for the 2026 financial year, driven primarily by the expansion of the store network and the new franchising model. Despite the overall increase in turnover, like-for-like sales are, however, expected to fall by around 2.6 per cent, confirming that the consumer environment remains challenging, particularly in European markets. In the fourth quarter alone, sales are forecast to rise by 2 per cent, with new store openings and franchising set to contribute around 5 percentage points. The underlying figure therefore remains weaker, with like-for-like sales expected to fall by around 3 per cent.

On the London Stock Exchange yesterday, shares in the parent company, Ab Foods, took a hit right from the start of trading, reflecting the market’s disappointment with the group’s outlook. By the close of trading, the shares had slumped by 8 per cent to 1,859 pence per share. Today, the share price is attempting a modest recovery, gaining just under half a percentage point.

In terms of profitability, the outlook for 2026 remains broadly stable. The adjusted operating margin is expected to be around 10 per cent, despite weak consumer spending in several markets. However, the forecast 2% growth in sales, against a decline in like-for-like sales, highlights how the expansion of the retail network is the main driver of revenue growth. The ability to turn new store openings, particularly in the United States, and the franchise network into profitable growth will therefore be crucial to sustaining the group’s development trajectory.

The United Kingdom, the main target market, is expected to close the fourth quarter with sales up by around 1 per cent and like-for-like performance remaining broadly stable. Primark has continued to gain market share despite the overall contraction of the market. However, performance during the quarter was affected by exceptionally high temperatures, which delayed purchases of autumn-related items and clothing for colder weather. As temperatures fell, sales picked up towards the end of the period.

The situation in continental Europe is more complex, with consumer confidence remaining weak. For the fourth quarter, Primark expects sales to fall by 1 per cent, whilst like-for-like sales are expected to decline by around 4.3 per cent. The company is taking action on several fronts, ranging from greater price competitiveness and shop improvements to an increase in digital marketing. Particular attention is being paid to the main European markets (Spain, France and Italia), where marketing investment has been increased, drawing on the experience gained in the UK.