Primark sees first half sales rise
Primark owner Associated British Foods has reported that the fashion retailers first half sales were 7% ahead of the same period last year at constant currency.
In the 24 weeks to 27 February, sales rose by 5% at actual exchange rates to £2.6 billion with trade driven by increased retail selling space.
Meanwhile, Primark’s operating profit dropped by 3% to £322 million in the period.
Following a strong performance at the start of the financial year, trading was weaker in the weeks leading up to and over Christmas, as a result of unseasonably warm weather across northern Europe. This resulted in like-for-like sales for the first half being less than 1% below last year.
ABF said Primark’s stores in France delivered a strong like-for-like performance despite the very high sales densities achieved in their first year of trading last year. As expected, the impact of new store openings on the like-for-like sales in existing stores in Germany and the Netherlands eased.
The company said early trading at Primark’s two stores in the US had been “encouraging”, with positive customer feedback.
At 27 February 2016, 299 stores were trading from 11.5 million square feet of retail selling space.
Primark opened a net six new stores in the period including a flagship, 133,000 square foot store on Gran Via in central Madrid in October, and a second store in the US at the King of Prussia mall in Pennsylvania, at the end of November.
The number of openings will be greater in the second half, with a further 0.3 million square feet in seven new stores already opened since the half year including Cagnes-sur-Mer, near Nice, and Toulon in France. The remaining openings will be weighted towards the end of the second half.
In the US, six stores are scheduled to open later this year and there are plans to open a 70,000 square foot store in the American Dream shopping mall in New Jersey in 2017. This will bring the total number of stores in the US to nine.
Across the wider ABF group, which includes sugar, ingredients, grocery and agriculture businesses, adjusted pre-tax profit increased by 4% to £466 million.
George Weston, ABF chief executive, said: "These results demonstrate underlying progress for all of our businesses in the period despite currency. Good buying and selling space expansion continued at Primark, cost reduction and performance improvements contributed to a better result at sugar, profits were well ahead at ingredients, and profit margins improved at grocery and agriculture."
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