Primark expects growth in sales despite unseasonable weather

In a pre-close update, the fashion retailer said it expects sales to be approximately 15% higher in the fourth quarter compared with the same period last year.

In the same period, UK sales are expected to increase 8% with like-for-like sales predicted to be up 7%. The retailer said it grew its market share in the country from 6.2% to 6.4% in the 12 weeks to August despite facing harsh weather conditions that impacted transactions and footfall.

Sales in Europe are expected to be 18% higher with like-for-like sales up 9%, while US sales are expected to increase 45% driven by a “strong programme of new store openings”.

Parent company ABF said it expects Primark’s adjusted operating profit margin to be weaker in the second half of the financial year “due to higher-than-expected stock loss from stores across the estate and a modest amount of German restructuring costs”.

Primark’s second-half adjusted operating profit margin is expected to be slightly below 8% and for the full financial year to be around 8%.

ABF said: “At Primark, we continue to expect 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. We therefore expect Primark adjusted operating profit margin to recover strongly in the next financial year.”