Primark profits surged 25% during its half year, driven by higher margins and strong sales in its UK and European markets
The retailer saw its adjusted operating profits for the 24 weeks to March 2, 2019 surge by 25% up to £426m, while total revenue was up 4% to over £3.6bn.
Global sales at the value retailer were up 4.4% year on year, driven by increased retailing space, which helped partially offset a 1.5% decline in like-for-like sales.
The value fashion retailer reported a 2.3% uptick year on year in UK sales, while like-for-like sales in the region grew by 0.6%. Low footfall in November was offset by “good trading in all other months of the first half”, particularly in the last two months of the period.
Primark also reported that early customer reactions to its new spring/summer range have been “encouraging”.
European sales grew 5.3% year on year, but like-for-like sales fell by 3.2%, which Primark put down to a decline in the German market and low footfall across the region in November. However, Primark did report “strong sales growth” in Spain, France, Italy and Belgium.
It also reported strong performance of its business in the US, which it said was driven by “excellent trading” at its recently opened store in Brooklyn, New York. Operating margins in the US were 11.7%, up nearly two percentage points on the previous year.
Primark said it expects to add 950,000 sq ft of new selling space during the next financial year, which will comprise six new stores.
George Weston, chief executive of Primark’s parent company Associated British Foods, described the results as “robust” and praised the retailer for delivering ”excellent profit growth, driven by further development of our customer experience and selling space expansion”.
Analysis: How Primark and Boohoo are beating the market
- Currently reading
Primark profits jump due to higher margins and increased sales