Poor early summer weather impacts Primark sales
Dismal early summer weather hit sales at budget clothing retailer Primark, owner Associated British Foods has revealed.
Like‐for‐like sales are expected to decrease by around 0.5% during the second half of the financial year, which will end 14 September 2024, with growth of 0.2% in Q3 and a projected decline of around 0.9% in Q4.
This primarily reflects unfavourable weather in the UK and Ireland in the second half, which resulted in lower footfall and particularly impacted sales of the brand's seasonal lines in womenswear and footwear.
While volumes were soft during H2, the average selling price increased as a result of mix. Primark also said it is benefiting from the relevance and breadth of its product ranges, including licensing and collaborations, alongside increased digital engagement with its customers.
In the UK, like‐for‐like sales are expected to decrease 2%, with footfall impacted by the challenging weather, particularly in April and June.
Sales growth in Europe is expected to be around 5%, while the US continued to make "good progress" during the second half, helped by recently opened stores and the launch of its first US marketing campaign.
Looking ahead, Associated British Foods expects Primark to deliver "good" sales growth in FY25 as the brand continues to execute its store rollout programme and product, digital and brand initiatives.
It also expects adjusted operating margin in FY25 to remain broadly in line with this year’s level, as gross margins stabilise and it steps up investment in strategic initiatives to drive sustainable growth.
George Weston, Chief Executive Officer of Associated British Foods, said: "The group has continued to perform well, delivering good growth, a significant improvement in profitability and excellent cash generation.
"While the British weather was not in Primark’s favour this summer, robust growth in other markets and new store openings have driven good sales overall. Strong margin delivery is enabling increased investment in our product, digital and brand initiatives."
The trading update comes as Primark launched its first-ever Swap Shop initiative to allow customers to exchange pre-loved and vintage clothing in store, in celebration of London Fashion Week.
Created in partnership with circular clothing company, Verte, the limited run of pop-ups will launch this month in select Primark stores across the UK, including London, Manchester and Birmingham.