PRIMARK HAS REPORTED a fall in annual profits as it cuts prices and tries to persuade cautious shoppers to spend.

The retailer, which trades as Penneys in Ireland, said sales at its existing stores had fallen, although new openings helped lift overall takings.

It lowered prices on hundreds of products in July, and said the initial response had been encouraging.

The results, published by parent company Associated British Foods (ABF) this morning, cover the year to 12 September.

Primark’s adjusted operating profits fell by 11% to just over £1 billion (€1.2 billion), down from £1.13 billion (€1.35 billion) the previous year.

Overall sales rose by 4% to £9.8 billion (€11.73 billion), helped by new shops in Europe and the US and its first franchise stores in the Middle East.

However, like-for-like sales, which allow comparisons without the boost from new store openings, fell by 2.6%.

The company blamed a “challenging consumer environment across most markets” and said profits had been affected by lower underlying sales, more discounting and increased spending on its business.

In continental Europe, like-for-like sales fell by 4.7%, with the company pointing to weak consumer confidence and saying its efforts to improve trading were at an earlier stage.

Sales fell in France and Italy, while Germany also remained a difficult market.

In the US, new openings helped sales grow by 13%, although the company said tariffs had weighed on consumer confidence and trading.

Primark opened 33 new stores during the year, including 14 in the US, and was trading from 508 stores across 19 markets by September, including four franchise shops.

Its womenswear ranges performed better than its other categories in every market. The retailer said it was now applying a similar approach elsewhere, including an overhaul of its children’s clothing ranges.

Split from parent company

ABF chief executive George Weston said the group had faced a “challenging operating environment and macroeconomic headwinds”.

“In Primark, we took significant steps to re-energise our customer proposition this year, both enhancing our product offer and strengthening our value credentials,” Weston said.

The company said new store openings were expected to support further sales growth in the coming year.

ABF also confirmed it remained on track to separate Primark from its food businesses in December 2027, creating two standalone businesses.

Across the wider group, adjusted pre-tax profits fell by 14% to £1.46 billion (€1.75 billion). ABF expects profits to fall again next year, mainly because of difficulties in its sugar business.

“Looking ahead, while we remain cautious about consumer sentiment and commodity costs, we will continue our sharp focus on driving financial performance and delivering the growth opportunities from capital investments across the Group,” Weston said.