Primark’s growth slows down in first nine months of fiscal 2018 despite store openings
The Irish low cost retailer revenues went up 7% at constant change rates, while like-for-like sales registered a better evolution than in first year half due to better trade in the Eurozone, said the group.
Primark slows down its growth. The Irish low cost retailer, owned by Associated British Foods, ended first nine months of fiscal 2018 (closed on June 23) with a 7% rise in sales, compared to a 8% upsurge in the first half of the year. At constant exchange rates, the increase stood at 6%.
The group has indicated that growth was motivated by an increase in selling space. On the other hand, like-for-like sales evolved better than in the first half of fiscal 2018 thanks to better trading conditions in the Eurozone, according to Primark’s trading update. Due to a stricter policy with stocks and discounts, the retailer expects to close the period with a higher-than-expected profit.
Primark has also highlighted the good performance achieved in the United Kingdom, while noting that there was growth in sales by comparable area. However, the rise was lower than that recorded in the first half of the year.
Primark expects a greater profit in the first nine months thanks to the reduction of discounts
The company’s operating margin stood at 9.8% in the first year half, compared to 10% in the same period of 2017. Primark explains that the negative impact of dollar exchange rates was offset by better buying conditions. Looking to the second half of the year, the group expects margin to improve notably due to the greater weakness of the dollar, a factor that will benefit sourcing.
In the first nine months, Primark has added around 74,320 square meters of selling space. On June 23, the Irish company operated with 357 stores around the world, totaling 13.6 million square meters.
Store openings concentrated in the third quarter, a period in which seven shops were added in cities such as Munich (Germany), Metz (France), Antwerp (Belgium), Tilburg (Holland) and Valencia, among others. For the remainder of the year, Primark has scheduled an opening in Brooklyn, its ninth point of sale in the United States, as well as the renovation of the store in Madrid’s Islazul shopping center.
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