Primark posts uplift in profit
Primark owner Associated British Foods has said that adjusted operating rose by 6% to £341 million at the budget fashion chain in the first half of its financial year.
Sales grew by 8% year-on-year to £3.477 billion in the 24 weeks to 3 March as trade was driven by increased retail selling space.
Meanwhile, like-for-like sales declined by 1.5% in the period after being held back by unseasonably warm weather in October. The company said the last week of the period was also challenging for Primark due to freezing temperatures across northern Europe. However, like-for-like sales recovered to growth of 1% in the 15 weeks to 24 February after record Christmas sales.
ABF said Primark performed well in the UK with sales climbing by 8% on the same period in the previous year driven by a 3% uplift in like-for-like sales and an increase in selling space. It also made progress with its US business as it continues to refine the operating model of stores in the north east of the country.
Retail selling space has increased by 0.4 million square feet since the previous financial year end and, at 3 March 2018, 352 stores were trading from 14.3 million square feet of space. Seven new stores were opened in the period in the UK, Germany, France and Portugal. In addition, there were three relocations in the UK including a return to the redeveloped Westgate shopping centre in Oxford and a move to larger stores in Rotherham and Grimsby.
Looking ahead ABF said: “We expect an acceleration in Primark profit growth in the second half as a result of an improvement in margin over the same period last year. This will be driven by better buying and some benefit of the recent weakness of the US dollar which will more than offset an expected return to a more normal level of markdowns, compared to the very low level achieved last year.”
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