Primark bags record festive sales for Associated British Foods
The low-cost fashion chain’s performance in the week before Christmas hit an all-time high.
Primark owner Associated British Foods (AB Foods) has cheered record festive sales at the low-cost fashion chain, but warned that sugar revenues would suffer from plunging prices.
The FTSE 100 group said Primark’s performance in the week before Christmas hit an all-time high, with sales lifting 7% in the 16 weeks to January 6 once exchange rate changes were stripped out.
The fashion retailer, which bolstered its footprint to 350 stores after launching five new shops over the period, also enjoyed “good trading” in the five weeks leading up to Christmas.
Growth was underpinned by the robust UK market and an increase in retail space, helping the chain to shrug off unseasonably warm weather in October which pegged back European sales.
It added that like-for-like sales were “strong” as it snapped up a greater share of the market.
In a trading update the company said: “The UK continued to perform well with strong like-for-like sales, a consequent strong increase in share of the total market, and trading which reflected the breadth of our consumer offering.”
On the currency impact, it added: “Operating margins in the first half are now expected to be close to those in the same period last year with better buying virtually offsetting the adverse effect of the weaker sterling to US dollar exchange rate on purchases.”
The firm endured tougher trading at its sugar business, with revenues dropping 12% at constant currency.
AB Foods said it was pencilling in a heftier drop in revenue and profits at its sugar arm for the full year, as it grappled with a hit to its UK and Spanish business caused by “significantly lower” EU sugar prices.
However, the firm said it was still on track to boost operating profits and earnings at year end, with group revenues for the 16-week period to January 6 rising 4% at constant currency.