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Primark invoices 6% more thanks to the sales boost in its new stores

Date: July 14, 2024 Time: 14:43:06

The Primark fashion retail chain posted an adjusted operating profit of 508 million pounds sterling (589 million euros) during the first six months of its fiscal year (October-March), which is 45% more than the result recorded by the multinational in the same period of the previous year.

In terms of sales, in the first six months of the fiscal year, Primark achieved a revenue figure of 4,500 million pounds sterling (5,218 million euros), which represents a year-on-year increase of 6% or 7.5% discount the effect of the exchange rate.

On the other hand, the adjusted operating profit margin for the period reached 11.3%, compared to 8.3% a year earlier, driven by a significant improvement in the gross product margin, thanks to lower material and freight costs and the annualization of price increases from the previous year, partially offset by the impact of the exchange rate.

In the eight weeks to March 2, 2024, sales increased by 6.3% and trading was generally smoother in terms of volumes, although due to persistent colder weather, average selling prices were higher. higher than expected across all cold weather products, while Home sales were strong, but cold, wet weather slowed luggage, beach and swimwear sales.

New stores, higher sales

Overall, new stores contributed 5.4% of sales growth, due to both increased selling space and higher sales densities. Footfall was generally in line with the same period last year, with remarkably strong business activity in city center stores, especially those located in tourist destinations.

In Europe (excluding the United Kingdom), the chain’s sales grew by 7.9%, with a contribution of 6.4% from new sales space and an increase in comparable sales of 1.5%, with commercial activity in Spain “above the market”, with strong sales growth in stores located in tourist regions, although partially offset by adverse weather conditions.

In the United Kingdom, sales grew by 4.3% compared to the same period last year, driven by comparable sales growth of 3.6% and a contribution from new space of 0.7%, increasing market share Primark to 6.9% from 6.7%. In the case of the United States, sales grew by 38.4%, driven by the opening of new stores.

For its part, the textile chain has admitted that the loss of stocks remained high in most countries and to continue investing in stocks to mitigate this loss, while the increase in labor costs was in line with expectations.

“We expect Primark to continue delivering strong results in the second quarter driven by our store expansion programme”

On the other hand, at the end of the semester Primark had 440 stores, after the opening of nine new stores, including three in the United States, three in France, two in Spain and one in Poland, and the closure of a store in Germany.

In the second half of its fiscal year, Primark will arrive in Hungary with the opening of its first store in the country and has confirmed its goal of reaching 530 stores by the end of 2026.

“We expect Primark to continue to perform well in the second half driven by our store expansion program and modest comparable growth levels, while we focus on driving volumes,” the company has anticipated, which is confident of a moderate improvement in adjusted operating margin in the second half compared to the first, although with an increase in investment to support medium-term growth.

* This website provides news content gathered from various internet sources. It is crucial to understand that we are not responsible for the accuracy, completeness, or reliability of the information presented Read More

Puck Henry
Puck Henry
Puck Henry is an editor for ePrimefeed covering all types of news.
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