Value fashion giant Primark expects to take a hit on earnings after having to close overseas stores amid the coronavirus crisis and seeing a fall in like-for-likes in the UK.

Primark parent ABF said that it has shut branches in France, Italy, Spain and Austria ”until the respective governments permit them to reopen”. The shops account for 20% of Primark’s selling space and 30% of sales.

ABF warned the revenue hit would take a toll. While it reassured that first-half adjusted operating profit will be ahead of expectations, ”mainly due to higher margins for Primark and grocery”, it also said that “given the effect of Covid-19 on Primark’s sales, it is too early to provide earnings guidance for the remainder of the current financial year” .

ABF reported that it had expected sales of £190m from the affected European stores over the next four weeks and said that “the remainder of the estate, including the UK which represents 41% of sales, has seen like-for-like sales declines over the last two weeks and these have accelerated over the past few days as a result of reduced footfall”.

”We are managing the business appropriately, but do not expect to significantly mitigate the effect of the contribution lost from these sales.”

ABF emphasised: “The group has a strong balance sheet, substantial cash liquidity with some £800m of net cash at the half year, and significant undrawn bank facilities.”

ABF will issue interim results on April 21. 

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