Fast fashion retailer Primark has today reported a like-for-like (LFL) sales rise of seven per cent in the first half as its Chairman announced “the Primark success story continues”.
In the 24 weeks ended March 2nd 2013, total sales grew 24 per cent ahead of the same period last year, while LFLs were boosted by weak comparatives on the warm Autumn 2011, which helped the retailer deliver an “exceptionally strong” first half.
Operating profit jumped 54.5 per cent to £238 million over the period despite prolonged cold weather affecting sales over the first months of this year.
Primark CEO George Weston explained: “Trading over the Christmas period was good but has been weaker during the prolonged period of cold weather since the New Year.”
New store openings remain a focus for Primark, which increased retail selling space by 13 per cent since H1 2012 as it opened 15 stores, including six in Spain and four in the UK, notably its second Oxford Street store.
Primark opened two new stores in Germany, two in Austria and an additional store in the Netherlands and will enter the French market in the months ahead though warned that the pace of store openings would slow over the remainder of the year.
Nonetheless, Neil Saunders, Managing Director of analyst firm Conlumino, believes that the retailer’s “stellar” results are set to continue as it strengthens its position in a crowded market.
“Although this trading period comes against a softer comparative from the previous year (thanks mostly to an unseasonably warm autumn) the stellar numbers underline the continued strong appeal of Primark’s offer,” Saunders said.
“Trading over the Christmas period was particularly strong, although the unseasonably cold weather has dampened the growth rate slightly during the early months of this year.
“Nevertheless, the LFL and overall growth are both well above overall market growth indicating that Primark continues to take significant levels of share.
“The overall growth rate is primarily the result of the delivery of an extensive programme of physical expansion.
“Although the pace of space growth will slow, Primark still has plenty of opportunities for further physical expansion, especially so in France, Spain and Germany where it remains embryonic.
“We expect Primark’s outperformance to continue for the next few years; albeit with the pace of growth moderating slightly.”
Charles Sinclair, Chairman of Associated British Foods explained that the retailer remains committed to creating a presence in emerging markets, adding that the group anticipates strong full-year profit growth.
He added: “The Primark success story continues.
“Trading in the period was very strong, the profit margin was much improved, customers in continental Europe have taken enthusiastically to the Primark brand and there is very real momentum in the addition of selling space.
“Encouraged by this success, capital investment will continue.”