Primark, in its recent trading update, has stated the brand would generate 5.5 per cent more sales than past year at constant currency 6 per cent at actual exchange rates), driven by increased selling space. But this will be offset by a 2 per cent decline in like-for-likes (LFL).
The company has stated the chain had performed well in the UK, where full-year sales are expected to be 6 per cent higher over last, and its share of clothing market has also increased significantly. The brand’s stores in Spain, Portugal and Italy also delivered strong sales growth in the year. LFL sales decreased due to a decline in northern Europe where the unseasonable weather during three periods this year led to difficult retail conditions. Despite this, sales in northern Europe were well ahead of last year driven by increased selling space.
The company’s operating margin during decline to 9.8 per cent, down from 10 per cent year-on-year, due to the adverse effect of the US dollar exchange rate on purchases. But margin in H2 will be “well ahead of the first half and last year, driven by the benefit of the weakening of the US dollar exchange rate on purchases and by better buying.”