Associated British Foods confirmed a 2.7% drop in underlying sales at its Primark clothing business during the key Christmas quarter, matching earlier profit-warning estimates. The 16-week trading update showed a stark regional split, with U.K. and Irish sales rising 1.1% while continental Europe, representing 49% of revenue, declined 5.7%.

The group’s overall revenue of £6.76 billion held steady, but the Primark weakness underscores challenges for the value-fashion retailer. Its U.S. operations, a smaller segment, were flat. This performance follows a profit warning earlier this month, signaling the high-stakes holiday season was tougher than expected for the fast-fashion giant.

Investors will now watch how Primark navigates the spring season without the heavy discounting that often follows a poor Christmas. The company’s next major update, its interim results on April 21, will be critical for assessing whether the sales pressure is easing or if margin compression is coming.