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(qlmbusinessnews.com via bbc.co.uk – – Mon, 26 Feb 2018) London, Uk – –
Sales at Primark took a hit in autumn following a spell of warmer than usual weather, but the fashion chain expects profit growth to pick up this year.
Like-for-like sales – which ignore new stores – at the chain are set to fall 1% in the 24 weeks to 3 March.
Primark's owner, Associated British Foods (ABF), said sales were hit by “unseasonably warm weather” in October.
However, it says profit growth is set to accelerate in the second half of the year, partly due to the weaker dollar.
As well as the UK, Primark operates across Europe and has been expanding in the US.
Despite sales falling across Primark as a whole, like-for-like sales in the UK were up 4% where the chain performed “very well”, ABF said.
The company also said underlying sales at Primark rose 1% in the 16 weeks to 3 March, and the chain saw record sales in the week before Christmas.
ABF also expects profit margins at the fashion chain to increase in the months ahead.
“This will be driven by better buying and some benefit of the recent weakness of the US dollar on purchases which will more than offset an expected return to a more normal level of markdowns, compared to the very low level achieved last year.”
As well as Primark, ABF also has sugar, grocery and agriculture businesses, with the grocery unit owning brands such as Twinings, Ovaltine, Silver Spoon, and Jordans cereals.
ABF said it expected half-year operating profits for the group to be similar to levels seen last year.
While most of its businesses had seen revenues rise, its sugar unit's revenue and profit is expected fall, mainly as a result of “significantly lower” EU prices which, ABF said, had affected its UK and Spanish businesses.
