Primark boosted by strong fourth quarter
Associated British Foods has said trading at its Primark fashion chain has exceeded expectations in its fourth quarter.
In a pre-close trading update for the year to 12 September, the company said the retailer’s stores began reopening during May, June and July after Covid-19 lockdowns and that trading during the latest three month period has been strong.
ABF is now expecting that Primark’s full year adjusted operating profit on an IFRS16 basis, excluding exceptional charges, to be at least at the top end of the £300 million to £350 million range previously advised. This compares to £913 million in the previous financial year. Cumulative sales since reopening to the year-end are expected to reach £2 billion.
The company said Primark’s average basket size was initially significantly higher than last year when stores reopened due to pent-up demand. While this has now reduced, it is still higher than a year ago.
ABF is expecting like-for-like sales across UK Primark stores since reopening to be down 12% and sales in Europe and the US to fall by 17% and 9% respectively.
Sales at the retailer’s stores in retail parks have been higher than the same period last year while sales in shopping centre and high street stores have stayed at around the same level. In contrast, sales in city centre stores have been impacted by significantly reduced footfall due to a drop in the number of tourists and commuters.
In the new financial year, ABF is expecting to open 14 new Primark stores including four in Spain, three in the US, two in Italy and one each in the UK, France, Netherlands, Poland and the Czech Republic.
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