At the annual general meeting today the chairman of Associated British Foods (ABF), Michael McLintock, will say that “during November Primark trading was challenging, in a tough retail market, but with careful inventory management and improved margins, our expectation for the increase in Primark profit is unchanged.”
“At this early stage in our new financial year, sales and profit for the first eight weeks of trading for the group were in line with expectations.”
Neil Wilson, the chief market analyst at Markets.com, said: “We know it’s tough out there and share prices across the piece reflect that already to a large degree.”
“But Primark has done better than most and the fact that it too is facing severe headwinds is a concern for the sector as a whole. ABF shares shipped 2.5% on this and we are seeing some read across to other retail stocks.”
“If Primark is struggling, what chance does the rest of the high street have? Some of the weaker high street stocks are sliding even as the broader market climbs.”
“M&S (LON: MKS) shares are down 0.5% on the read across from this – we know that Marks and Spencer is facing a bit of make or break Christmas.
“Debenhams (LON: DEB), another one on the ropes and needing a big uplift from this holiday season, has dropped 2%.”
Shares in the group (LON: ABF) are currently trading -4.55% (1358GMT).