Primark owner ABF heralded an “excellent” trading at the value chain as it eyes greater profits in the year ahead.
Sales rose 17% to £9bn over the year to 16 September, up 8.5% on a like-for-like basis, which it said had exceeded its expectations.
Although adjusted profit margin dipped to 8.2% as the business implemented “selective price increases” to protect profitability, shoppers continued to “shop with us enthusiastically”, the business said.
It said Primark margin is “now moving back to its historic levels” and it expects it to exceed 10% this year.
Operating profits surged 30% to £717m, however, on an adjusted basis profits dipped 3%.
In the UK, sales increased by 11% year on year, driven by like-for-like growth of 10% helped in particular by its new customer website.
The value chain said the sales rise was driven by not just the price rises, but well received product ranges, good footfall, strong performing new stores and the rollout of its revamped website.
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Primark said its product offer was “a source of differentiation and competitive advantage”, with its velvet plush leggings helping drive a record Christmas last year, while it’s boho-inpired range boosting sales during the summer.
Throughout the year it broadened its ranges and collaborations to appeal to customers trying Primark for the first time as well as existing customers, with its Barbie collection with Mattel during the summer proving “very successful”.
The group said trading was much better than it expected at the start of the year when volatile inflation had threatened to disrupt consumer spending.
“However, the strength of the Primark offer, and our decision to pass on only part of our input cost increases, stood us in good stead with our customers,” it said.
Its space expansion continued, both in Europe and the US, adding that the benefits of the restructuring of its German estate are starting to become visible.
The group added: “Although consumer demand remains uncertain, Primark is as well placed as it has ever been. We continue to believe that Primark’s offer is very attractive not just to existing customers but also to new customers engaged by our digital platform, new store openings, and word of mouth which remains as powerful as ever.
“With Primark margin now moving back to its historic levels, we view the future for this business with confidence.”
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