Primark expects profits to be in line with last year following strong reopening

No comments

Primark owner ABF has said the fashion giant’s stores have performed exceptionally well since reopening and predicted full-year profits will be in line with the previous year.

In a trading update for the 40 weeks to June 19, 2021, Primark sales hit £3.8bn, down 11% on a constant currency basis. However, sales in the 16-week period between February 28 and June 19, 2021, were up more than 200% to £1.6bn.

Owner ABF said this strong recovery in the third quarter was driven by the reopening of the group’s international store estate, combined with the opening of seven new stores. It said Primark was well ahead of the £0.6bn in sales the group managed in the same period the previous year.

The retailer also said that in the current quarter sales had been “ahead of expectation in all markets” and that a number of stores had set new sales records since reopening.

Primark said that net cash had also significantly strengthened to more than £1.4bn during the period, due to strong sales performance and a reduction in the inventories that had built up during Covid.

The retailer said that, if no Primark stores are forced to close due to Covid in the remainder of the financial year, “we expect the excess inventory at the end of lockdown to have returned to more normal levels by the financial year-end”.

Like-for-like store sales during the period were 3% ahead of the comparable period two years ago when sales were at pre-Covid levels.

Primark reported “very strong increases” in sales from stores in the UK, Republic of Ireland, France and Italy, with the US being “marginally ahead” of expectations, and sales elsewhere in continental Europe slowing due to ongoing restrictions.

The retailer said the coronavirus pandemic had reinforced the relevance of its value appeal to customers and highlighted the strength of its bricks-and-mortar offering.

“The relevance and appeal of our value-for-money offering has been evidenced by the number of customers that have returned to shop in person in our stores, across every one of our markets, each time we have reopened post-lockdown,” it said.

“This reopening has also seen a resurgence in demand for fashion across womenswear and menswear as customers start to step out of lockdown leisurewear.”