Primark owner Associated British Foods said sales growth slowed over the golden quarter due to the unseasonable weather and warned it could face additional supply chain costs amid the Red Sea disruption.
Sales for the fashion retailer jumped 7.9% to £3.4bn in the 16 weeks to 6 January, down from a 18% jump the year before, which it attributed to “a slow start [to the period] given the unseasonal warm weather and strong Christmas trading”.
On a like-for-like basis, sales edged up 2.1% “driven by higher average selling prices” – a sharp slowdown from the 8% growth in the previous quarter.
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In the UK, total sales rose 4.5% and 3.8% on a like-for-like basis, with strong sales in the run-up to Christmas helping to offset the early warm weather challenges at the start of the period.
Revenue jumped 8.1% across the rest of Europe, while sales in the US rocketed 45% over the golden quarter driven by new store openings.
The group said its product offer “performed well” in the period, spotlighting strong sales across its performance wear, leisurewear, tailored clothing and Rita Ora collection.
It added that while sales of its cold weather categories were “initially slower” at the start of the period, it has “much improved with the recent cold temperatures”.
ABF said it felt “more confident in the delivery of the Primark adjusted operating margin in this financial year, driven by a further improvement in product gross margin”.
“This should insulate us well against potential additional costs of supply due to the disruption in the Red Sea should they arise,” it added.
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