Value fashion giant Primark shrugged off the effect of the snow before Christmas to record a 12% increase in sales, but warned that EBITDA margins will fall during the second half.
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Sales rose 12% at Primark, which is owned by Associated British Foods (ABF), in the 16 weeks to January 8. Performance was boosted by the opening of new stores in the UK, the Netherlands and Germany. Analysts said like-for-likes rose 4% during the period.
Panmure Gordon analyst Graham Jones forecast an 80 basis points fall in Primark’s EBITDA margins to 11.7%, due to inflationary pressures.
Jones said: “EBITDA margins were higher than last year but ABF reiterates that margins will fall in the second half, due to a combination of higher cotton prices, the VAT increase and Primark’s commitment to remaining the best value on the high street.”
The retailer will open six more stores during the remainder of the financial year, bringing its total to 220 by September, and will then step up expansion.
THIS WEEK’S CHRISTMAS LIKE-FOR LIKES
| COMPANY | CHANGE % | PERIOD |
|---|---|---|
| Mulberry (full price stores) | 70% | six weeks to January 15 |
| Mulberry (off-price stores) | 34% | six weeks to January 15 |
| Primark | +4% (analyst estimate) | 16 weeks to January 8 |
| WHSmith (group) | -5% | 21 weeks to January 22 |
| WHSmith (high street) | -7% | eight weeks to January 22 |
| WHSmith (travel) | -3% | 21 weeks to January 22 |
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