Primark's sales improve in UK and Ireland in second half

Ahead of the release of the full year results, the parent company of Primark provided a trading update that highlights sequential improvements in the UK and Ireland region
“I’m pleased with how the Group has performed in the second half of our financial year in what continues to be a challenging environment, characterised by consumer caution, geopolitical uncertainty and inflation. Primark delivered improved trading in the UK and strong sales growth in the US, while trading on the continent was softer in a weaker consumer environment”, summed up George Weston, Chief Executive of Associated British Foods (ABF), owner of Primark.
Second Half Trading Update
ABF said that it expects Primark's sales to grow by around 1% in the second half of the year (ending on the 13th of September), as compared to the same period in the previous financial year. However, like-for-like sales are expected to be around 2% lower than in the second half of the 2024 financial year, with a projected decline of 2.4% and 2% in the third and fourth quarter, respectively.The retailer anticipates that sales in the UK and Ireland will increase by 1% year-on-year during this period, which is a significant improvement on the 4% decline recorded in the first half. According to the statement, this reflects a strong product offering, particularly in womenswear, as well as increased digital engagement.
On a comparable basis to the first half of the previous year, Primark’s sales are expected to increase by 2% in Spain and Portugal, and by 9% in Central and Eastern Europe, driven by new store openings. However, sales are expected to decrease by 4% in France and Italy, and by 2% in Northern Europe (Germany, the Netherlands, Belgium and Austria).
In the US, sales are expected to rise by around 23% year-on-year in the second half of the year, as Primark’s products have proved popular with budget-conscious consumers.
Primark expects the adjusted operating margin in the second half of the year to be below that in the first half, mainly due to the timing of one-off items that benefited the first half. “Focused cost optimisation and efficiency savings supported a step up in investment across product, brand and digital initiatives”, noted ABF.
Still, it is anticipated that the full year adjusted operating profit margin will be broadly in line with last year’s.
Full year results will be announced on the 4th of November.
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