Primark latest to blame weather for sales
The warm autumn affected Primark's like-for-like sales
Value fashion retailer Primark has achieved like-for-like sales below the expectations of its parent company, as unusually warmer weather hurt revenues.
Primark, owned by Associated British Foods, said the warm autumn had affected like-for-like sales in the year ended September, echoing similar recent warnings by other apparel retailers.
Chairman Charles Sinclair said in his AGM address: "Like-for-like sales are currently below expectation as a result of the unseasonably warm weather but, having budgeted this year for a higher level of markdowns, at this early stage in the year Primark's profit estimate for the full year is unchanged."
Like-for-like sales growth for the year was at 4%, but store expansion meant total sales were up 10% over the last two months.
The discount clothing chain, which recently toasted a "magnificent" year with sales of nearly GBP5bn and a 29% rise in profits, has been on an expansion drive, adding 1.2m sq ft of selling space, entering France and announcing plans to open in the north-east of the US. The company said it expects to continue its expansion drive in the coming year.
Grayling analyst William Alego, however, offered a note of caution. "It is not long since Asos was enjoying strong sales growth and seemed invulnerable, only for things to go wrong relatively quickly as rapid international expansion overstretched the online seller. This may present a warning to Primark on the pitfalls of expanding too rapidly, especially since same store sales only rose by 4%, with future expansion potentially cannibalising this margin."
Nonetheless, Alego added: "With sales up 17% and approaching GBP5bn, Primark is certainly enjoying its time in the sunshine. Observers will also be encouraged by strong performance in France which bodes well for the ongoing US expansion."
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