Primark full year sales to be 5.5% up on last year
Primark owner Associated British Foods is expecting the fashion retailer’s full year sales to be 5.5% ahead of last year at constant currency.
In a pre-close trading statement, the company said the uplift has been driven by an increase in selling space which was offset by a 2% decline in like-for-like sales.
ABF said Primark performed well in the UK where full year sales will be 6% ahead of the previous year. Although stores in Spain, Portugal and Italy performed well, like-for-like sales across the group were held back by a fall in northern Europe where unseasonable weather impacted trade.
During the year, Primark opened five new stores in Germany, four in the UK, two in France and one each in Portugal, Belgium, Spain, Netherlands and the US.
The company said operating margin for the full year will be approximately 11% compared to 10.4% in the prior year.
Looking ahead to next year, ABF said Primark has secured forward exchange contracts against all merchandise for the autumn/winter season. It added: “Assuming that spring/summer is secured at current exchange rates we would expect the operating margin in Primark to be in line with this year at 11%. However, the exchange rate applicable to sales in the second half will be sensitive to sterling exchange rate volatility which is likely to arise given a period of intense Brexit negotiations.”
In the new financial year Primark will add one million square feet of selling space, with more than half of that being added in the first half. Part of the expansion plans will include moving to new premises at Birmingham Pavilions, which at 160,000 square feet will be its biggest store in its entire estate.
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