Primark sales rocket as lockdown fades into past

No comments

Sales at value fashion giant Primark surged 60% year on year in its first half – when stores remained open, in contrast to Covid closures the previous year.

Parent company ABF also reported that operating profit margin had “recovered strongly” and is now likely to come in at about 11% in the period to March 5, 2022, which is “close to the pre-Covid levels achieved two years ago”.

Primark Chicago chekcout area

Primark said the USA ‘continues to outperform the rest of the store estate’

The bulk of Primark’s stores traded throughout the period and like-for-like sales “improved compared to the final quarter of our 2021 financial year”. However, they are likely to still be 11% lower than the pre-Covid levels achieved in the same period two years ago.

Primark, which does not transact online, said “customer footfall is picking up again in most markets, particularly the UK and Ireland”, following the disruption caused by the outbreak of Omicron.

Sales in UK branches were “well ahead of last year”. Like for likes “have improved and are expected to be 9% below two years ago” and total sales are expected to be 8% below.

The retailer said stores in retail parks and town centres continue to outperform destination city centre stores and retail park like for likes were “ahead of pre-Covid levels”.

Sales in continental Europe were also “well ahead of last year” and the US “continues to outperform the rest of the store estate”.

Primark said: “Operating profit margin in the period is expected to be some 11% at the half-year. This mainly reflects our stores trading for the whole of the period and an increase in sales densities over the same period last year.

“The effect of inflation on raw materials and supply chain costs in this first half has been broadly mitigated by a favourable US dollar exchange rate and a reduction in store operating costs and overheads. With our stock purchases largely committed for the second half of the financial year, we expect some reduction in the operating profit margin from that achieved in the first half reflecting further inflationary pressures.

“The pressure of disruption to the supply chain experienced in the autumn has continued to alleviate despite some delays in dispatch and slightly longer lead times.”