Primark's Brexit forecast is mixed
Primark owner Associated British Foods has warned that sterling's slump against the dollar will impact the clothing chain's UK margins in the coming year. However, the group as a whole could benefit from changes in legislation and trade agreements as a result of Brexit.
Full-year results reported by Associated British Foods (ABF) yesterday were slightly ahead of expectations, with group revenue up 5pc at £13.4bn (€15bn) and adjusted operating profit 3pc higher at £1.1bn (€1.2bn). Shares in the group soared over 6pc.
Primark - which trades as Penneys in Ireland and is headquartered in Dublin - saw its sales jump 11pc to £5.9bn (€6.6bn) in the 53 weeks to September 17, with its adjusted operating profit rising 2pc to £689m (€772.2m). On a constant currency basis, revenue was 9pc higher and profits were up 1pc.
ABF said that sales increase at Primark were driven by expansion.
"Unseasonable weather and cautious consumer sentiment led to value declines in the clothing retail sector in some of our important markets," it noted. Like-for-like sales in the financial year were down 2pc. ABF added that Penneys in Ireland delivered a "strong performance" during the year.