Primark expects to post a jump in total sales and like-for-likes in the UK during its first half following a “very strong” store opening programme.
The fashion giant’s owner Associated British Foods (ABF) said in a pre-close trading update today that the chain’s total sales are poised to spike 11% in constant currencies in the six months to March 4, 2017.
In actual exchange rates, Primark’s sales are set to surge 22%.
ABF said the uplift was driven by increased retail selling space – which advanced 12% year-on-year – but added that like-for-like sales should come in 2% ahead of last year in the UK and flat for the wider group following a decline in the Netherlands.
However, ABF warned that Primark’s operating margins will decline, driven down by the fall in the value of the pound and the strength of the dollar, which have dented input costs.
The business said its expectation for operating profit margins across the wider full-year period remain “unchanged”.
ABF added that its capital expenditure during the first half would come in higher than the previous year, following the focus on growing Primark’s estate.
The fashion giant has opened 800,000 sq ft of new selling space since the end of its last financial year, including the launch of 16 new stores across the UK, Ireland, Spain, Germany, France, Italy, the Netherlands and the US.
Primark also invested heavily in expanding its Oxford Street store by almost 40%, taking the size of the shop to 114,000 sq ft.
It plans to open a further 300,000 sq ft of space in its third quarter, including new stores in Uxbridge in the UK, Granada in Spain, Charleroi in Belgium and Staten Island in the US.