Primark has reported an uplift in interim sales driven by its new space, but flagged that if coronavirus persists it may result in some product shortages later in the year.
The fashion retailer said it expects overall sales to be up 4.2% year on year in the period covering the 24 weeks to February 29, bolstered by new store space and flat like-for-like sales.
The retailer’s UK sales are expected to be up 3% year on year, although like-for-likes are set to fall 1.3% as strong trading in November and December was offset by declines in January and February.
Sales across Primark’s European division are expected to rise 5.3%, up 0.5% in like-for-like terms and driven by strong sales in France, Belgium and Italy.
The fashion retailer also said it expects “much improved operating results” for its US division, spurred by strong performance from its Brooklyn store and planned openings in Florida and at the American Dream mall in New Jersey.
Primark has said that, due to increased supply ahead of Chinese New Year, the business does not expect to see any short-term impact from coronavirus. However, the retailer said that if delays to factory production continue “the risk of supply shortages on some lines later this financial year increases”.
Primark said it is working closely with its Chinese suppliers to assess the impact to its supply chain and is assessing mitigating strategies, such as increasing production from existing suppliers in other regions.
The fashion retailer said that, due to a decline in margin because of exchange rates, operating profit is expected to be marginally down year on year in constant currency and lease-adjusted terms, but will be up on a reported basis.
No comments yet