Primark results expected to ‘disappoint’
Poor start to summer could see recent trading hurt
Primark delivered six months of booming growth in the 24 weeks to the start of March. Photograph: Bob Collier/Bloomberg
Analysts at Canaccord Genuity said the unseasonably cold spring and poor start to the summer could see Primark’s recent trading “disappoint”, with underlying sales growth set to slow to 6 per cent.
The budget clothing business, which trades in Ireland as Penneys, delivered six months of booming growth in the 24 weeks to the start of March, with like-for-like sales increasing 7 per cent, outstripping the performance of such rivals as Marks & Spencer.
Once 15 new store openings were factored in, Primark’s sales raced 24 per cent ahead to almost £2 billion (€2.3 billion).
The chain, which has more than 250 stores in Europe, was boosted by an “ideal combination” of lower cotton prices, better exchange rates and lower markdowns, helping operating profits to surge 55 per cent to £238 million. But retailers’ sales of spring and summer fashion ranges were hurt by the second-coldest March on record, with freezing weather lasting into April.
While AB Foods expects “strong profit growth” from Primark, the company has warned it will not be at the same level of the first half as the cotton price boost fades. – (PA)