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Strong UK sales drive growth at Primark

Primark has reported an uplift in full-year sales and profits, driven by new store openings and a solid performance in the UK.

Sales across the business were up 19% at actual exchange rates for the 52 weeks ended 16 September, and up 12% on a constant currency basis. 

This was partly thanks to a 1.5 million sq ft expansion in retail space and net 30 new store openings.

Primark’s adjusted operating profit rose 3% in constant currency to £735m. However, its operating profit margin declined from 11.6% to 10.4%, which it said “reflected the strength of the US dollar on input costs”.

The value fashion chain said it performed “particularly well” in the UK, where like-for-like sales were up 10% on the year before and its share of the clothing market “increased considerably”. It added that the response to its new autumn/winter range has been ”encouraging”.

At the end of the financial year Primark had 182 stores across the UK, an increase of 11 on the previous year.

Sales in continental Europe were 16% ahead of last year at constant currency and on a comparable week basis, reflecting the extensive selling space expansion there.

Of Primark’s top 20 stores by sales density, 15 are now in continental Europe, including seven in its newest markets of France and Italy.

The retailer opened three new US stores during the year and extended its Boston store by 20% to 92,000 sq ft.

In the coming year it plans to reduce the size of three of its existing US stores ”in order to optimise their efficiency and provide the best shopping experience for our customers”. It will open its ninth US store in Brooklyn, New York, in the summer.

Primark warned that the weakness of sterling against the US dollar would continue to have a negative impact on margin in the first half of the new financial year.

But it added: “However, the strengthening of the euro against the US dollar in recent months will have a beneficial transaction effect on Primark’s eurozone margins particularly in the second half of next year if these rates prevail. With a more typical level of markdowns and the absorption of some cost increases we expect full year margins to be similar to that achieved this year.”

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