LONDON, United Kingdom — Associated British Foods blamed a fall in shopper numbers and unseasonably warm weather for negative underlying sales at its Primark fashion chain in November, sending its shares lower.
Shares in the group, which also has major sugar, grocery, agriculture and ingredients divisions, fell by as much as 3.3 percent on Friday.
The update on Primark added to evidence of a slowdown in British consumer spending in the run-up to Brexit.
Industry data published on Tuesday showed British consumer spending grew last month at its slowest pace in more than a year, excluding Easter distortions, with online Black Friday sales failing to offset a lack of confidence about the economy.
In a brief trading update published ahead of its annual shareholders' meeting, AB Foods said the group's sales and profit for the first eight weeks of its 2018-19 financial year, which began on Sept. 16, were in line with expectations.
However, it said that during November Primark's trading "was challenging, in a tough retail market."
Finance director John Bason told Reuters Primark's like-for-like sales were "just positive" in September and October but were negative in November. He declined to give precise numbers.
"This isn't a call on Christmas — we've got three big weekends coming up now before Christmas. But I think it is a call on quite mild weather during November and I think it's affected footfall," said Bason.
"It's a blip that from a profit perspective we can manage," he said.
He said that with careful inventory management and improved margins, the group's expectation for an increase in Primark's full-year profit was unchanged.
Primark, which accounts for about half of AB Foods' revenue and profit, currently trades from 363 stores in Europe and North America.
AB Foods maintained the overall guidance it issued last month — group adjusted earnings per share for 2018-19 in line with its 2017-18 outcome.
The stock was down 2.4 percent at 2,293 pence at 0846 GMT, valuing the business at 18 billion pounds.
By James Davey; editors: Jason Neely and Adrian Croft.