Budget retailer Primark has seen annual earnings jump by more than 50% in spite of an early summer weather hit to sales.
Owner Associated British Foods reported a 53% rise in operating profits at Primark, to £1.1 billion over the year to September 14 as groupwide like-for-like sales lifted 1.2%.
In the UK, comparable same-store sales rose 1% as a 3.6% rise in the first half was offset by a 1.3% fall over the final six months as poor weather in April and June knocked demand for summer clothing.
AB Foods said in the UK and Ireland overall, sales edged up 0.7% in the year.
Sales of our seasonal summer clothing, as well as footwear, beachwear and swimwear, were impacted by wet weather
It said: “In both markets, challenging weather impacted footfall during the second half, particularly in April and June.”
The group added: “Sales of our seasonal summer clothing, as well as footwear, beachwear and swimwear, were impacted by wet weather.”
But it said it had seen a “very encouraging start” to autumn/winter trading, with “strong like-for-like growth in both markets in the last weeks of the financial year”.
The wider AB Foods group posted pre-tax profits up 43% at £1.92 billion, up 33% on an underlying basis to a better-than-expected £1.96 billion.
The company said it was “well positioned”, but warned over profits in its sugar business for the new financial year thanks to pricing woes in Europe.
AB Foods said: “We expect the reduction in European sugar pricing in the fourth quarter of 2024 to impact performance in our sugar business significantly in 2025.”
It is pencilling in underlying operating profit for the sugar arm to be between £50 million and £75 million, down from £199 million in 2023-24.
But the firm expects sugar profitability to recover in 2026, “to be more in line with 2024”.
The group said Primark is targeting mid-single percentage digit sales growth over the year ahead, boosted by a new store rollout across Europe and the US.
Underlying profit margins are set to remain flat at the fashion division, however, as it said it would “step up” investment to drive growth.
