Primark Growth Slows Due to Warm Autumn/Winter in Europe

Primark is part of a conglomerate, so its quarterly reporting is relatively broad-brush. ABF said that Primark’s sales were up 7% in the first quarter of fiscal year 2016, the 16 weeks ending January 2. This marked a slowdown from recent periods. The company said that comps were “strong” in the first seven weeks of the period and weaker in the following nine weeks due to unseasonal weather across Europe. The company added 0.4 million square feet of selling space in the quarter, a 3.6% increase. The latest comparable indications are for the 2015 full fiscal year, when total sales rose by 13% at constant rates. Primark’s sales rose by 13% at constant rates in the first 40 weeks of fiscal 2015 and by 15% in the first half of the same year.

Source: Company reports/FBIC Global Retail & Technology

In Europe, Primark’s total first-quarter sales were “well ahead” of last year, ABF said. Globally, the company opened six new stores, including a 133,000-square-foot Madrid flagship. Plans for its first Italian store are “well advanced,” and the company revealed that it plans to open a second store in Italy, north of Florence, by summer 2017. As we expected, the company gave no indication of US performance so far, following its launch into the country in September 2015. The first quarter saw Primark open its second US store, this one at the King of Prussia Mall in Pennsylvania. The company confirmed plans to open six more US stores this calendar year, in line with its previous announcement that it would open eight stores in the US initially. Additionally, in 2017, the company will open a 70,000-square-foot store in the American Dream shopping mall in New Jersey.