Primark profits rise despite like-for-like sales fall
Like-for-like sales at Primark fell 2.1pc during its last financial year, despite the chain securing a "significant increase" in its share of the total UK clothing market, according to owner Associated British Foods (ABF).
ABF said that unseasonable weather during three distinct periods during the 52 weeks to September 15, curtailed like-for-like sales, particularly in the eurozone. In the UK, like-for-like sales growth during the financial year was up 1.2pc, achieved in a market that contracted during the year.
Dublin-headquartered Primark, which trades as Penneys in Ireland, had 360 stores across Europe and the United States at the end of the financial year, with 185 of those in the UK.
Despite the decline in like-for-like sales at the retailer, an increase in selling space helped to drive the unit's overall revenue and profits higher.
Its adjusted operating profit climbed 13pc to £843m (€965.8m) on a constant currency basis, while its revenue was 5pc higher at £7.4bn (€8.4bn) on the same basis.
Primark accounted for 47pc of ABF's group £15.6bn (€17.8bn) in revenue during the last financial year, and 60pc of its total £1.4bn (€1.6bn) in adjusted operating profit.
ABF's interests also span sugar production, agri business, and grocery products. It owns brands such as Ovaltine, Blue Dragon, Ryvita and Twinings.
The group, controlled by the Weston family that owns Selfridges, Arnotts and Brown Thomas, said that its Primark business had performed strongly during the second half of the financial year and opened a net 15 new stores during the full year.
However, while sales in the eurozone were up 4.7pc on a constant currency basis during the period, like-for-like sales plunged, also by 4.7pc.
Sales growth was achieved in Spain, Portugal and Germany, with "especially strong" growth in France, Belgium and Italy, according to ABF.
Primark's expansion has taken it to the United States in recent years, where it opened its ninth store, in New York's Brooklyn area, in July. It said the new store has been trading strongly.
Primark also intends to enter Slovenia next year - the chain's 12th market - and has also signed a lease for its first outlet in Poland.