Companies

Primark to close the year with sales growth

Sep 15, 2023 United Kingdom

Primark's parent company, Associated British Foods (ABF), issued a trading update just before the end of its financial year, anticipating sales growth for both the last quarter and the full year

In the three months to the 16^th of September, the fashion retailer's sales are expected to grow by around 15%, on a comparable basis to the same period of fiscal 2022.

By region, Primark's sales in the UK should increase by 8% in the fourth quarter fiscal year, with like-for-like sales increasing by 7%, as compared to the same quarter of last year. ABF added that despite “unusually variable and unseasonable weather” especially in July and in recent weeks, which impacted transactions and footfall, the retailer's performance was resilient.

For similar reasons, in Europe excluding the UK, Primark's sales are expected to rise by 18%, with like-for-like sales up by 9%. At the same time, in the US, its sales are projected to increase by 45% year-over-year, “driven by the strong programme of new store openings”.

Full Year Results

ABF also reported that in the 52 weeks to the 16^th of September, sales at Primark should also increase by 15%, on a comparable basis to financial 2022, with a like-for-like sales growth of 9% year-over-year.

“These higher sales are the result of limited and carefully selected price increases through this financial year to partially recover high levels of input cost inflation, assisted by a strong performance from new stores opened in the year, and by demand for our attractive ranges”, added the parent company of Primark. After opening eight stores in the last quarter (four in the US and one each in France, Spain, Poland, and Romania), Primark is trading a total of 432 stores.

However, the fashion retailer's adjusted operating profit margin will be weaker in the second half, slightly below 8%, thanks to “higher-than-expected stock loss from stores across the estate and a modest amount of German restructuring costs”. Then, its full year adjusted operating profit margin is also expected at 8%.

Outlook 2023-2024

For the upcoming fiscal year, Primark is anticipating “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”, as well as a strong recovery in its adjusted operating profit margin.

Image Credits: www.drapersonline.com/

United Kingdom Companies Fashion Quarter Results Results Sales