Primark has reported first quarter sales up 12% year on year despite the snowy pre-Christmas weather, but warned that higher cotton prices are expected to affect margins.

Sales in the 16 weeks to January 8, sales were up 13% at constant exchange rates and the value fashion retailer said that reflected “good” like-for-like sales and an increase in retail selling space.

Primark said operating margin was higher than the same period last year, but this is expected to come under pressure primarily in the second half when the VAT increase combines with the effect of higher cotton prices.The retailer said it remains “committed to offering the best value on the high street”.

Primark has 214 stores and 6.9 million sq ft of selling space at present. Ten stores opened in the period including six in the UK, five of which were former Bhs shops, two in the Canary Islands, Gelsenkirchen in Germany and Hoofddorp in the Netherlands.

Capital expenditure on new stores in the full year is expected to be higher than last year.

 

Parent Associated British Foods reported group revenue up 10%, or 7% at constant exchange rates.

It said its results are in line with its expectations for the period.

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