Primark ups FY guidance on strong H1 sales

Primark has upped its guidance for the full year after seeing robust sales growth in the first half of the year.

In a pre-closing trading update, the company said it expects half-year sales to be 16 percent above levels from the prior year as it continues to rebound from the pandemic.

On a like-for-like basis, sales were up 10 percent, with the retailer citing higher unit volumes and higher average selling prices.

The fast fashion company said trading was “well ahead of expectations”, with “a material improvement in both the UK and Europe”.

In the same period a year earlier, the company was impacted by Omicron from December onwards, which resulted in a drop in footfall and the closure of stores in the Netherlands and Austria.

Footfall in the first half of its most recent year “increased strongly” in both the UK and in Europe, it said.

The retailer pointed at particularly strong trading in the UK, with the retailer expecting a 15 percent increase in H1 sales.

It also noted that the early reaction to its spring and summer ranges has been “very positive”.

Primark ups full-year profit guidance

The retailer now expects its first-half adjusted operating profit margin to be above 8 percent, down from 11.7 percent a year earlier.

“The margin reduction is the result of the increase in the cost of bought-in goods, driven by the significant strengthening of the US dollar against sterling and the euro, higher freight rates, and inflation in labour and energy costs,” it said.

Despite that, however, the company upped its full-year forecast due to higher sales and some lower operating costs. Primark now expects adjusted operating profit margin to be above 8 percent.

On a group level, parent company AB Foods (ABF) said it expects half-year sales to be 20 percent higher than the prior year, and for adjusted operating profit to be broadly the same.

Group adjusted operating profit and adjusted earnings per share are now expected to be broadly in line with the previous year.