Primark predicts sales gains despite supply chain and Covid disruption

ABF chair Michael McLintock said Primark’s sales had come in “ahead of expectations” during its financial year to date, while like for likes in its fourth quarter so far had “improved” year on year.

McLintock said sales between the crucial month of December and April 2022 were likely to be “significantly better than sales in the comparable period in the last financial year” when the majority of Primark’s estate was closed.

ABF said it expects “significant progress” in both its half- and full-year results with adjusted operating profit and adjusted earnings per share both expected to rise.

However, it was cautious over the effects of supply chain disruption including “port congestion and road freight limitations”, and the rising cost of energy, logistics and raw materials.

ABF said it was offsetting that impact through cost savings and price increases “where necessary”.

But McLintock insisted supply chain issues would not impact availability in the countdown to Christmas. He said: “We are managing disruption in our supply chain by prioritising the products most in demand with the support of our logistics providers for whom we are a very important customer.

“We have stock cover on the vast majority of lines for the important Christmas trading period.”

Primark’s stores on the continent are also being hit by additional restrictions following the spread of the Omicron Covid-19 variant. Its shops in the Netherlands are operating under reduced trading hours, while visitors to German stores must show vaccine passes. The retailer’s five Austrian stores have been shut under a national lockdown.

Despite those challenges, Primark is pressing ahead with its overseas expansion. Since the end of ABF’s financial year in September, Primark has opened stores in Vigo, Spain, and Catania, Italy, taking the total number of Primark stores to 400.