Primark trading well ahead of expectations
Primark owner Associated British Foods has said first half trading at the fashion retailer has been better than expected and “good” in all markets.
ABF said it expects total Primark sales to be 16% ahead of the same period last year at constant currency, driven by a 10% uplift in like-for-like sales as a result of higher unit volumes and higher average selling prices.
The retailer also benefited from stronger footfall in both the UK and Europe due to the absence of Covid-19 related restrictions.
ABF said all new Primark stores opened in the period are performing well with high sales densities. The group is expecting retail selling space to be 17.8 million square feet at the end of the half year compared to 17 million square feet a year earlier.
Sales in the UK were particularly strong and the group now expects sales for the half year to grow by 15%, driven by an increase in like-for-like sales of 14%.
Primark continued to roll out its improved website in the period and is aiming for it to be online for customers in Germany, Spain, France and the US “soon”. The site is expected to be live in the retailer’s remaining markets by the middle of the year.
While ABF is now predicting an improvement to its previous expectations of adjusted operating profit in the second half, it remains cautious about the resilience of consumer discretionary spending in the face of continuing inflation in the cost of living and higher interest rates.
It added: “Our expectation is that like-for-like sales growth in the second half will be lower than that achieved in the first half but, based on our experience to date, will be better than our previous expectation.”
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