UK: Primark set for "excellent" H1 performance
Primark is set to report a 14% increase in first-half sales
Associated British Foods (ABF) saw its share price fall this morning (24 February) on lower sales in its sugar business, but hailed an "excellent" performance from its Primark value fashion chain in the first half.
In a pre-close trading update, the company said Primark is set to report a 14% increase in sales for the six months to 1 March, thanks to like-for-like sales growth of 4%, a rise in retail selling space, and stong sales in its new larger stores.
Although like-for-like sales in the first eight weeks of the financial year were held back by "unseasonably warm weather" and strong comparatives with the previous year, the rest of the period saw "excellent" trading, including Christmas.
As a result, operating profit margin is now expected to be higher than in the same period last year, benefiting from warehouse and distribution efficiencies, as well as lower freight rates.
New store openings added 8% more selling space since the last half year, with the company now operating 269 stores trading across 9.6m square feet.
During the period, Primark opened 16 new stores, including its first two in France, as well as six in Spain and three in the UK.
ABF's shares fell 2.81% to 2909p at 10:39 GMT this morning.
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