Primark owner Associated British Foods (ABF) has said it expects the fast fashion value retailer’s operating profit to be “way ahead” of last year following a reduction in markdowns.
In a pre-close trading update, ABF noted that Primark had performed particularly well in the UK, where full-year sales are expected to be 10% ahead of last year. The retailer enjoyed strong trading in the run-up to Easter and benefited from favourable weather in the fourth quarter.
Profit margin fell to 10%, down from 11.7% in the first half of the year, as a result of the stronger dollar and higher costs.
Primark plans to add an additional 1.2m sq ft of selling space over the next financial year. Most of the retail expansion will be in France, Germany and the UK. The retailer plans a total of 19 new stores, as well as several relocations and extensions. The larger of the new stores will open in Stuttgart, Munich, Toulouse, Bordeaux and Antwerp.