Primark revenues rose strongly during the financial year to September 16, 2023, up 15 percent to 9 billion pounds reflecting a sales increase across its core markets.
The company, part of the Associated British Foods plc, said, the performance was driven by carefully selected price increases taken to partially offset high and volatile input cost inflation, well-received product ranges and the resulting appeal of our offer to new and existing customers as well as good footfall, strongly performing new stores and the rollout of enhanced customer website.
Commenting on the annual trading results, George Weston, chief executive of Associated British Foods, said in a statement: “Trading at Primark was excellent under the circumstances. Although consumer demand remains uncertain, Primark is as well placed as it has ever been. With Primark margin now moving back to its historic levels, we view the future for this business with confidence.”
Primark posts sales increase in H1 and H2
In the first half, Primark sales increased by 17 percent to 4.2 billion pounds and in the second half, sales rose by 14 percent to 4.8 billion pounds.
The company added that cold weather essentials and other seasonal product lines, including velvet plush leggings, drove strong sales leading into a record Christmas season which included a resurgence in women's partywear, tailoring separates and beauty products as a return to festive socialising gathered pace.
In the new year sales of beachwear and luggage were strong as customers looked early to holidays. Summer trading was positive, led by our boho-inspired design trend. During the year, Primark expanded the Edit collection, a premium essentials range for women, across more stores which sold well and continued UK and European collaborations with Stacey Solomon, Kem Cetinay and Paula Echevarria.
The company also launched its first international partnership with Rita Ora whose first collection sales surpassed expectations. Sales of licensed products grew significantly year-on-year, in particular over Christmas across the portfolio of brand partners including Disney, Netflix, The Grinch, and US sports partners NFL and NBA and summer Barbie collection with Mattel also proved successful.
Primark further said that trading was influenced in the second half of the year by weather. The company saw good sales through the early summer with the exception of Iberia which suffered unusually poor weather in May. In July, there was very poor weather in the UK and Ireland and heatwaves in Southern Europe, followed by warm conditions in August and September which coincided with the launch of our autumn/winter ranges.
Like-for-like sales growth was 8.5 percent for the year. In the first half, like-for-like sales rose by 10 percent driven by higher average selling prices and higher unit volumes partially offset by smaller basket sizes, while in the second half of the year like-for-like growth was lower than in the first half at 7 percent.
Primark increases retail selling space across core markets
The company further said that space growth contributed sales growth of 6 percent, driven by the increase in selling space, particularly Italy, France and the US, and higher sales densities in most new stores.
In the UK, sales increased by 11 percent, driven by like-for-like growth of 10 percent. Primark’s market share increased from 6.4 percent last year to 6.7 percent this year. In Europe excluding the UK, sales increased by 18 percent, with like-for-like growth of 8 percent despite weaker trading at times due to unseasonable weather.
Primark’s store estates in all the countries in which it operates delivered like-for-like sales growth, with good performances in Iberia, France, Germany, Belgium, the Netherlands and Eastern Europe. Italy delivered strong total sales growth and continues to operate on high sales densities.
The company opened 17 stores in the European region in the period, while in Germany, Primark closed two stores in the period and, after the period end, the company closed one more store and agreed two further closures.
In the US, total net sales were 24 percent higher than last year driven by space expansion. Primark opened eight new stores in the period, largely in the Northeast, taking the estate to 21 stores and is on track to meet the US store expansion target of around 60 stores by the end of 2026.
The company also continued to expand its footprint beyond the Northeast with further progress in the new store pipeline and two leases signed recently in Texas.
At September 16, 2023, the company was trading from 432 stores, with 27 new stores added in the period including eight in the US; six in Central and Eastern Europe with three in Poland, two in Romania, first store in Slovakia, four in Italy and France respectively; three in Spain; and two in the UK. The company