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Primark profits to come in at top end of its predicted range

Tom Shearsmith
07 September 2020

Primark's full-year profits are expected to fall at the top end of the retailer’s revised range, following strong trading after lockdown.

Trading in the fourth quarter exceeded Primark's expectations, as all stores reopened during May, June and July, with trading during the fourth quarter reported as "strong".

In the latest four-week UK market data for sales in all channels Primark achieved its highest ever value and volume shares for this time of year.

Primark's parent company, Associated British Foods, warned in a statement: "We expect adjusted earnings per share to be significantly below last year as a result of the decline in Primark’s profit due to the store closures and the ongoing impacts on customer demand caused by COVID-19."

Cumulative sales since reopening to the year-end are expected to reach £2bn, with an adjusted operating profit on an IFRS16 basis for the year, is now expected to be at least at the top end of the previously advised £300-350m range.

The value retailer reports that the each stores performance has varied, reflecting the current circumstances of consumers including increased home working, less commuting and much less tourism.

Sales at stores in retail parks are higher than a year ago, shopping centre and regional high street stores are broadly in line with last year and large destination city centre stores, which are heavily reliant on tourism and commuters, have seen a significant decline in footfall. Primark's 16 largest destination city centre stores contributed 13% of total sales pre-COVID-19 and 8% of sales after reopening.

In the next financial year, Primark plans to open 14 new stores globally.

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