Primark

Financial overview 

• Total sales climbed 4.9% to £9,448m in FY2024, its highest on record 
• UK sales grew 2% accounting for 47% of total sales 
• Adjusted operating profit jumped 51% to £1,108m 
• Pre-tax profit margin climbed from 7.0% to 10.6% 

Total sales at Primark rose 4.9% to £9,448m in the year to 14 September 2024 (FY2024). Revenue climbed 6% in constant currency, which the retailer said reflected “a strong performance” across its key growth markets, including the US, France, Spain, Italy and Central and Eastern Europe (‘CEE’), as well as the UK (its largest market).  

“We continued to benefit from the relevance of our great-value clothing and the expansion of our product and category offering, including through collaborations and licensing partnerships. We are also successfully executing our store rollout programme across the US and Europe, which is adding profitable new selling space. This year’s growth reflects investment in recent years to enhance our unique store experience and to increase our use of effective digital customer engagement.” 

Total like-for-like sales climbed 1.2%, with 2.1% growth in the first half driven by “the annualisation of last year’s carefully-selected price increases”. Like-for-like growth in the second half slowed to 0.5% with “a positive product mix benefit more than offsetting the impact of soft volumes, mainly due to unfavourable weather in the UK and Ireland”. 

Internationally, all regions grew year-on-year in FY2024. Within the US, a key growth market, sales jumped 30% accounting for 5% of total revenue, reflecting “continued good progress”.  

A breakdown of each region’s percentage of total sales is provided below. 

Group sales had jumped 17.0% to £9,008m in FY2023, an increase of 15.0% on a constant currency basis as the strength of the value-led brand served it well against a backdrop of volatile inflation and weaker consumer spending.    

Sales were ahead in all markets, driven by good footfall, strongly-performing new stores and well-received product ranges, with the rollout of the enhanced customer website also contributing to growth.  

Like-for-like growth came in at 8.5% across the full year for the group in FY2023. This reflected 10% growth in the first half and 7% in the second.    

All countries delivered like-for-like sales growth, with “good performances” in Iberia, France, Germany (where restructuring is ongoing), Belgium, the Netherlands and Eastern Europe, while Italy was singled out as having performed particularly well.     

Total sales in continental Europe rose 18% overall in FY2023, with like-for-like growth of 8% despite weaker trading at times due to unseasonal weather.    The strong forward momentum was also maintained in the growing US market where sales rose 24% driven by ongoing expansion.    

The buoyant international operation accounted for 57% of total Primark sales in FY2023. 

Adjusted operating profit surged 51% to £1,108m in the latest financial year, with adjusted operating margin up from 8.2% to 11.7%.  

Primark said the recovery reflected an increase in gross margin, largely due to lower material costs and reduced realised freight costs. These were partially offset by labour cost inflation and an increase in investment in digital and data capabilities, technology and brand marketing to support “long-term growth”.  

The retailer expects this investment to continue over the medium term while focusing on driving cost optimisation and efficiencies, including “through the store operating model, the introduction of self-service checkouts (‘SCOs’) and energy cost efficiencies”. 

While sales were bolstered by the retailer’s decision not to pass on all of its inflationary cost increases to customers through higher prices, this impacted the bottom line in FY2023. Adjusted operating margins reduced by more than a point and a half to 8.2%  after operating profit dipped 2.8% to £735m. Management said that “higher costs of bought-in goods, higher freight rates, higher labour costs and higher energy costs outweighed the benefits of our selective price increases and an improvement in store sales densities due to higher footfall”.    

Total Primark sales had been virtually restored to pre-pandemic levels during the 2022 financial year following a 37.6% reported increase to £7,697m. Operating profits had also improved strongly as footfall recovered following the end of Covid-related restrictions.     

With its stores trading for the full year in FY2022, adjusted operating margin improved sharply to 9.8% on the back of a 136% surge in profit from £321m to £756m.     

Operating profit had plummeted 60% to £362m in FY2020 as the pandemic hit, with the operating margin halved to 6.1% as a result.   

UK sales and like-for-like sales analysis 

UK sales will be updated when the retailer files at Companies House.  

Primark revealed sales in the UK and Ireland edged up 2% in FY2024, accounting for 47% of total sales. Retail Navigator estimates these to be around £3,928m. 

Like-for-like sales within the region grew 0.7%, with a 3.1% rise in its first half, but a 1.6% decline in the second. Challenging weather impacted footfall during the second half, particularly in April and June. However, it had “a very encouraging start” to sales of its Autumn/Winter ranges, with strong like-for-like growth in both markets in the last weeks of the financial year.  

The UK remains Primark’s largest market, with share growing from FY2023 when sales climbed 14% to £3,851m or 43% of overall sales. 

UK growth in FY2023 was driven by a 10% increase in like-for-like sales which management said was “helped in particular by our new customer website that has now been running for more than a year”. This strong performance was achieved “despite unhelpful weather impacts in the third and fourth quarters”.   

UK market share rose to 6.7%, up from 6.4% the previous year, according to Kantar data for the 52 weeks to 16 September 2023.  Primark maintained this share in the latest financial year. 

UK profit analysis 

UK profit for FY2024 will be updated when the retailer files at Companies House. 

UK profit fell 29% year-on-year in FY2023, driven by items impacting margin such as increased stock loss, slightly higher markdowns and unfavourable currency impacts.  

The retailer also saw its employee costs rise in FY2023 as it invested in new stores. UK operating margin slimmed from 7.0% to 4.8%, with pre-tax profit sliding from £199.6m to £141.2m. 

UK profits had strengthened in FY2022 on the back of the sharp improvement in trading performance. UK operating profit nearly doubled to £237.3m in the year, raising operating margin by nearly two full points to 7.0% - although still well down on pre-pandemic levels.    

Having shown signs of recovery in FY2022, UK gross margins slimmed from 21.4% to 18.2% in FY2023.   

UK stores financial analysis 

Footfall continued to build across the UK estate in FY2024, supported by the retailer’s new website which is continuing to drive footfall into stores.   

The retailer said it “continued to expand and optimise our store portfolio in the UK and Ireland” during FY2024. In total, it opened three new stores. It now offers a click and collect service in 87 stores in the UK and expects this to be available in all stores in England, Wales and Scotland by the end of 2025. 

Sales densities have continued to improve as a result, coming in at around £505 / sq ft in the latest financial year, from £500/sq ft in FY2023 according to Retail Navigator estimates, which is something of a high for the retailer.   

Employees 

Primark reported employee numbers of 78,000 in the latest financial year. In 2024, 16 new store openings across the UK, Republic of Ireland and mainland Europe created almost 3,000 new roles and just under 250 managerial positions. 

Reflecting rapid expansion of the store network, the Primark headcount had been rising steadily to a peak of 78,000 in FY2019. It was brought down sharply during the challenging 2020 financial year, however, before moving ahead again subsequently, with the total coming in at 76,000 in FY2023.    

UK staff figures and costs will be updated when it files at Companies House in 2025. 

The UK headcount had been on a downward trend for several years and this accelerated during the pandemic, with the UK headcount having dropped back to just under 31,819 by FY2022. With new store openings, this moved up to 32,491 in FY2023. 

Bolstered by the reduction in headcount over the year, UK sales per employee increased to some £92,500 in FY2019, having been broadly static over the previous three years. This figure also fell back sharply in FY2020, however, as sales plummeted, dropping to just over £71,000 and remaining at this broad level in FY2021. With UK sales recovering strongly from FY2022, sales per UK employee increased to £106,000 in that year, rising to £118,525 in FY2023.    

Primark’s UK staff costs to sales ratio rose sharply as a result of the sales shortfalls during the pandemic, coming in at a very elevated 17.6% in FY2021 before being brought down to 13.2% in FY2022, although rose to 13.8% in FY2023. 

Forecast 

Parent ABF said it is targeting “mid-single digit” sales growth within Primark for the forthcoming year, “driven by store rollouts in our growth markets in Europe and US”. It said it expects to continue to focus on like-for-like sales growth in its more mature markets. Adjusted operating margin is anticipated to remain broadly in line with 2024. 

Group sales are expected to continue to grow strongly over the coming years, driven by the acceleration of its physical expansion programme. Growth could also be bolstered to a significant extent as its click-and-collect trial is rolled out.    

Retail Navigator expects group sales to exceed the £12.3bn mark by FY2029, with UK sales nearing £4.5bn.