Primark sales were up 13% in the year to date (the 40 weeks to 24 June) said parent company Associated British Foods in a trading update.
The value fashion retailer said increased selling space and an improvement in like-for-like sales had driven the strong performance. Its average selling space was also up 13% year on year, while sales growth in the last 16 weeks had improved further still and was up by 15%.
Primark said the run-up to Easter had been particularly strong (when compared with weak comparisons the prior year when the weather was poor and Easter fell early) and the UK, in particular, had done well with year-to-date sales up 9%.
Operating margin was squeezed in the first half, however, coming in at 10%, compared to 11.7% in the previous year, which was a result of the relative weakness of sterling against the US dollar leading to an increase in input costs. The second half would see further input cost pressure as currency hedges would be at a less advantageous rate, however due to lower mark downs and input “margin mitigation” the business said it expected the full year margin and the rate of decline to be in line with the first half.
Retail expansion has continued apace in the past financial year with retail selling space up by 1.3m sq ft since the beginning of the financial year. At 24 June 2017, Primark operated 339 stores from 13.6m sq ft of retail selling space. During the third quarter it opened 10 new stores in Uxbridge and Llandudno in the UK; Granada and Tarragona in Spain; Charleroi in Belgium; Zwolle and Hilversum in the Netherlands; Florence in Italy; and Staten Island, New York and South Shore, Massachusetts in the US.
