Primark expects openings to drive sales, but margins to suffer
The owner of the Irish chain expects margin for the full year to be “only a small reduction” on that achieved last year, on a lease-adjusted basis.
Primark will keep driving AB Foods’s sales, but its margins will suffer. The British group held today its Annual General Meeting, where it reiterated the outlook for the full year. Primark’s sales will continue to grow thanks to the expansion of selling space. However, the group expects margin for the full year to be “only a small reduction” on that achieved last year, on a lease-adjusted basis.
The effect of a weaker sterling on purchases will be largely offset by cost reductions in both the cost of goods and overheads. The company will continue to expand its selling space this year, with the most stores being added in France and Spain.
Since the year end, Primark has opened three new stores, bringing its total estate to 376 stores trading from 15.8 million sq. ft. Looking further ahead, the company has “a strong pipeline of quality sites”
Primark has opened three new stores since the year end
AB Food also insisted that “our businesses have completed all practical preparations for Brexit and contingency plans are in place should our businesses experience some disruption at the time of exit”.
In the year ended September 14, Primark grew 4% both at constant and actual Exchange rates, reaching a revenue of 7.7 billion pounds. Adjusted operated profit margin stood at 11.7%, up from 11.3% in 2018.
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