- Primark profits dip 3% in actual currency and 1% in constant currency
- Sales up 5% in actual currency and 7% in constant currency
- Value fashion retailer blames dollar for its profits dip
Primark’s profits have dipped as the value fashion retailer reported a rise in sales, blaming the drop in profits on the dollar.
Primark reported a dip in profits from £322m to £313m – a drop of 3% in actual currency and 1% in constant currency in the 24 weeks to February 27.
Like-for-likes fell by less than 1%, although when the Netherlands and Germany were taken out of the equation, like-for-likes rose by 1%. France, the Republic of Ireland and Spain were singled out as having good years.
Sales rose to £2.7bn from £2.5bn, a change of 5% in actual currency and 7% in constant currency.
It blamed headwinds from the dollar, in which it buys much of its clothing, for the fall in profits and attributed the rise in sales to increased selling space.
It also flagged the unseasonably warm weather across Northern Europe for weakened trading in the weeks up to and over Christmas.
In Northern Europe, trading in France “delivered a strong like-for-like performance” against tough comparables, while cannibalisation in the Netherlands and Germany eased.
Elsewhere, Primark said that trading in the US had been “encouraging”.
The retailer said: “Primark has been well received, particularly its exceptional value for money and the breadth of its product range. Footfall and sales density have increased steadily as awareness of the Primark brand, which started at a low level, continues to grow.”
Retail selling space increased 300,000 sq ft in the past six months to 11.5 million sq ft.
As of February 27, Primark had 299 stores with six new shops, including locations such as Gran Via in Madrid and the King of Prussia mall in Pennsylvania.
Primark plans to open more stores in the second half of the year, with another 1.1 million sq ft to be opened over the coming six months.
By the end of the year it will have nine stores in the US, including a 70,000 sq ft store in the New Jersey American Dream mall.
Last week Primark opened its first Italian store, in Arese, near Milan. It will open in Brescia this autumn and in Florence in 2017.
By the end of the year, Primark will have doubled its warehouse capacity compared with 2013. It is migrating its Magna Park distribution centre to a larger site in Northampton and is opening another facility in Roosendaal in the Netherlands.