Value fashion group Primark delivered an “outstanding” first-quarter sales performance, generating a 25% surge in turnover in the 16 weeks to January 5.
Sales at the retailer, which is owned by Associated British Foods (ABF), were above expectations, driven by “very strong” like-for-like growth, new store sales and “superior” sales densities in the larger new stores.
Like-for-like growth was particularly strong because of weak comparatives last year when the autumn weather was unseasonably warm, as well as “good” trading over the Christmas period.
ABF said: “Operating profit margin was higher than in the same period last year, reflecting not only the benefit, as expected, of lower cotton prices since last half-year, but also better trading.”
ABF added that Primark’s outperformance had more than offset a drop in trading at its AB Sugar division and it expected to make “further progress in adjusted operating profit for the full year, with the improvement heavily weighted towards the first half”.
Primark opened 14 new stores in the quarter, launching four in the UK, six in Spain, one in Germany and the Netherlands and its first two stores in Austria. That included Primark’s second Oxford Street store. It also refurbished and extended its store on Mary Street, Dublin and relocated its Sunderland store to a larger site.
The retailer increased selling space by 700,000 sq ft since the year end and by 1.1 million sq ft, or 14%, since the same time last year.
ABF said Primark would be slowing the rate of store openings for the remainder of this financial year, aiming to add a further 200,000 sq ft this year, but said it would pick up again in the next financial year.
Work on stores this year includes extensions to the Newcastle and Manchester sites, which will feature the new store design, while another store in Germany is planned for Frankfurt’s shopping district Zeil.