Primark expects Q4 sales growth despite impact of unseasonable weather
Primark owner Associated British Foods has said it expects the fashion retailer’s sales to be around 15% higher year-on-year in its fourth quarter.
Meanwhile, like-for-like sales growth is expected to come in at 8% with a 7% uplift in the UK.
In a pre-close trading update ahead of its full year results, ABF said Primark put in a resilient UK performance in the period, despite unseasonable weather in July and the first half of August affecting footfall.
In Europe, sales in the period are expected to be 18% higher with like-for-like sales growth of 9%. However, sales in the US are likely to be 45% higher as the retailer benefits from a strong programme of new store openings in the country.
ABF said sales for Primark’s full year are expected to be around 15% ahead of last year due to a strong performance from new stores and a “limited and carefully selected” price increases to partially recover high levels of input cost inflation. Meanwhile, like-for-like sales growth is likely to be around 9%.
The company said Primark’s adjusted operating profit margin will be weaker for the second half of the financial year due to higher-than-expected stock loss from stores and a “modest” amount of German restructuring costs.
Looking ahead, ABF said: “At Primark, we continue to expect a substantial recovery in gross margin as a result of lower material costs, the weakening of the US dollar against sterling and the euro and lower freight costs, all of which have improved in recent weeks. We therefore expect Primark adjusted operating profit margin to recover strongly in the next financial year.”
As part of its ongoing digital development programme, Primark announced back in April that it was expanding its fledgling Click & Collect trial to an additional 32 stores in London to take the total number to 57 in the UK. From tomorrow, the service will be extended to include womenswear.
