- Prachi Singh |
Associated British Foods announced that Group revenue for the 16 weeks ended January 2, 2016 was 3 percent ahead of the same period last year at constant currency, and was 2 percent behind at actual exchange rates. Sales at Primark were 7 percent ahead of last year at constant currency in line with the increase in retail selling space over the year. As a result of the weakening of the euro against sterling, total sales were 3 percent ahead of the same period last year at actual exchange rates.
The like-for-like sales performance in the first seven weeks of the financial year was strong, benefiting from comparison with a weaker performance in the prior year when the autumn was unseasonably warm. In the following nine weeks, like-for-like sales were weaker as a result of warmer and wetter weather across Europe, leading up to and over the Christmas period. As expected, the impact on like-for-like sales of new store openings in northern continental Europe was much reduced, and total sales in this region were well ahead of last year.
Retail expansion on cards
Retail selling space increased by 0.4 million sq. ft. and at January 2, 2016, 299 stores were trading. Primark opened six new stores in the period including a flagship store on Gran Via in central Madrid in October and second store in the US at the King of Prussia mall in Pennsylvania. It expects to open a further six stores in the US later this calendar year. In addition, in calendar 2017, it expects to open a 70,000 sq. ft. store in the American Dream shopping mall in New Jersey.
Primark also plans to open its first store in Italy, at Arese north-west of Milan, early this summer and a store in a mall north of Florence by the summer of 2017. Its new UK warehouse in Islip, Northamptonshire is currently under construction and will open by summer 2016, with migration of operations from Magna Park taking place over the following months. Warehouse in Roosendaal, Netherlands is also under construction and will open later in the year.
The underlying trading outlook for the group is unchanged. Investment in expansion opportunities will continue, most notably for Primark. There is no material change expected to impact on the translation of its overseas results and also on the transactional exposures. The company therefore continues to expect currency pressures to lead to a modest decline in adjusted operating profit and adjusted earnings for the group for the full year.