Primark half-year like-for-likes slip 2%

primark rent cuts
// Primark half-year sales up 4% but like-for-likes slip 2%
// However, higher margins mean profits should be “well ahead of the same period last year”.
// Primark’s UK sales rose 2% but like-for-likes were flat

Primark has reported an increase in overall half-year sales but like-for-likes for the same period took a hit thanks to a slowdown in Europe.

According to a pre-close trading update for the half-year period ending March 2, from parent company Association British Foods, Primark’s interim sales are expected to be four per cent ahead of last year thanks to increased retail selling space.

However, this would be partially offset by a two per cent decline in like-for-like sales.

AB Foods highlighted that with a much higher margin, Primark’s half-year profit is expected to be well ahead of the same period last year.

For its UK market, Primark sales were expected to be two per cent ahead of last year for the interim period, while like-for-like sales are expected flat.

AB Foods attributed the flat like-for-likes to low footfall in November, while also pointing out that Primark had “substantially increased” its share of the UK’s clothing, footwear and accessories market.

Sales in the Eurozone are expected to be five per cent ahead of last year, driven by strong sales growth in Spain, France, Italy and Belgium.

However, Primark’s like-for-like sales in the Eurozone are expected to show a decline of three per cent, partially due to difficult trading conditions in Germany which AB Foods said it is striving to address with a strengthened management team and reducing selling space at a few stores.

Meanwhile, AB Foods said the value retailer continued to perform “strongly” in the US and has reduced its operating loss in the country, thanks to a recently-opened Brooklyn store combined with like-for-like sales growth.

Primark’s retail selling space increased by 300,000sq ft since the financial year end and by March 2, 364 stores will be trading from 15.1 million sq ft compared to 14.3 million sq ft a year ago.

AB Foods said it still expected to open 900,000sq ft of new selling space in the remainder of the financial year.

In the UK, new Primark stores are earmarked for Hastings, Bluewater, Belfast and Milton Keynes while in April, is slated to open its largest store when it relocates to new premises in Birmingham.

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