The company expects to increase its revenues by 6%, fuelled by the store openings carried out throughout the fiscal year. The fashion retailer, owned by AB Foods, has blamed its negative performance in northern Europe to altered weather conditions.
Primark will end fiscal 2018 with growth boosted by its retail expansion. The low cost fashion retailer, owned by British group AB Foods, expects that revenues will rise by 6% this year, as new store openings will offset a negative like-for-like sales evolution, which are forecasted to fall 6%.
On a corporate statement, Primark has said that the business followed a positive path in United Kingdom, where it anticipates to grow by 6%, as well as in Spain, Portugal and Italy. However, organic growth was hit by a negative performance in northern Europe, where the “unseasonable weather during three periods this year led to difficult retail conditions”.
In the United States, where Primark has shifted its strategy several times, the group continues betting on shrinking the selling space of existing stores, assuring that the move is paying off businesswise.
Primark expects that its operating margin for the full year will be approximately 11%, although it quotes ‘Brexit’ as a threat
The company also forecasts that operating margin for the full year will increase to nearly 11%, compared to 10.4% in 2017. Primark hopes that an improvement on foreign exchanges rates and a reduction in the level of markdowns will improve profitability in 2018, after going down in the first half of the year.
“However, the exchange rate applicable to sales in the second half will be sensitive to sterling exchange rate volatility which is likely to arise given a period of intense Brexit negotiations”, says Primark in the same statement.
The retail chain will end fiscal 2018 with fifteen store openings, reaching 360 stores worldwide. During the period, Primark has opened five shops in Germany, four in the United Kingdom, two in France and one in Portugal, Belgium, Spain, Netherlands and the United States.
Moving forward into 2019, the company will focus its retail expansion in Germany, France, Spain and United Kingdom. The biggest stores will be opened in Berlin, Toulouse, Bordeaux, Sevilla, Almería, Brussels and Utrech. Besides, Primark will start operations in Slovenia, where it is set to open its first store in Ljubljana, reaching its twelfth country.