Primark posts strong growth in half year sales and profit
Primark has delivered 7.5% growth in half year sales to £4.5 billion as newly opened stores and last year’s selected price increases offset the impact of inflation.
Adjusted operating profit was also up in the 24 weeks to 2 March, surging by 46% at constant currency to £508 million.
In the UK, sales growth was 4.3% driven by a like-for-like sales rise of 3.6%. While sales of seasonal ranges were strong at Christmas, trading was softer in January and February due to wet weather and rail strike disruption.
City centre stores in London, Birmingham and Edinburgh performed particularly well due to the continued return of tourists and office workers to the locations.
Meanwhile, sales in Europe, excluding the UK, increased by 7.9% with new selling space contributing 6.4% to the growth. Sales in the US rose by 38.4% driven by new store openings in Woodfield Mall in Chicago, Smith Haven Long Island, and Charlotte in North Carolina.
Primark said its latest click and collect trial in the UK has gone well which has given it the confidence to roll out the service in all stores in England, Wales and Scotland. This will include the offer of a selected product range spanning womenswear, kids, menswear and homewares.
Looking ahead, Primark parent company Associated British Foods said it expects the retailer to continue to perform well in the second half of the year as a result of its store expansion programme and modest levels of like-for-like growth.
It added: “While the consumer environment remains soft, we expect to benefit from the strength of our value proposition, our product relevance and category stretch and our increasingly effective digital engagement.
“We expect a moderate improvement in adjusted operating margin in Primark in the second half compared to the first half, albeit with a step-up in investment to support medium-term growth.”
