AB Foods boosted by strong Primark sales
Primark owner Associated British Foods has announced that the groups adjusted operating profit for the second half of the year to 14 September will be ahead of expectations following a strong end to the year at the discount fashion chain.
In a pre-close trading statement, ABF said that sales at Primark for the full year are now expected to be 22% ahead of last year, at actual exchange rates, after being driven by an increase in selling space, like-for-like sales growth, and superior sales densities in the retailer’s larger new stores.
Although sales growth was subdued during the colder months of March and April, Primark enjoyed strong trading during the summer months and, as a result, ABF now expects the retailer's like-for-like sales growth to be close to 5% for the full year. ABF added that trading in stores in northern continental Europe has been strong throughout the year while like-for-like growth in Spain has improved after initially being held back by a large number of new store openings.
The group now expects Primark’s second half operating profit margin to be in line with the first half, beating expectations, following lower markdowns over the summer.
By the end of the current financial year Primark will have opened 16 new stores and extended its stores in Manchester, Newcastle, Chester and Mary Street, Dublin. This has added 0.8 million square feet of selling space and will bring the total to 257 stores and 9 million square feet at the financial year end.
Primark expects to add more than a million square feet of selling space in the new financial year with an “extensive” programme of openings in time for Christmas 2013 which will include a first store in France.
ABF will announce its full year results on 5 November 2013.
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