Primark, the popular fast-fashion retailer, is set to surpass previous expectations and drive success for parent company Associated British Foods, according to an update released ahead of its final results. The company will announce its financial results for the year ending September 16 on November 7, but has already revealed impressive performance projections.

Primark’s key Retail division, which includes its Primark and Penneys stores, is expected to achieve sales of around £9 billion for the year, representing a 15% increase from the previous year. The company’s like-for-like sales growth is also commendable, with a projected 9% increase.

In the fourth quarter, Primark experienced strong sales growth, with an expected 15% increase and a like-for-like growth of 8%. This growth can be attributed to several factors, including selective price increases, well-received product ranges, and the successful performance of new stores. Additionally, Primark anticipates a significant recovery in gross margin due to lower material costs, the weakening of the US dollar against the pound and the euro, and lower freight costs. As a result, the company predicts a strong rebound in its adjusted operating profit margin for the next financial year.

Primark’s performance in the UK remained resilient despite challenging weather conditions. The company expects sales to be up 8% in the fourth quarter, with like-for-like sales increasing by 7%. Furthermore, Primark’s market share in the UK grew to 6.4% compared to 6.2% for the 12 weeks ending August 20.

In Europe, Primark forecasts a powerful sales growth rate of 18% in the fourth quarter, with like-for-like sales anticipated to rise 9%. The company continued to trade well in Europe despite challenging weather conditions, including a heatwave in several regions.

The US market has proven particularly lucrative for Primark, with sales projected to increase by an impressive 45% in the fourth quarter. The addition of four new stores during this period has contributed to this success.

Overall, Primark’s full-year retail sales are expected to be 15% higher than the previous year, driven by an 11% increase in the UK and an 18% increase in the rest of Europe. Like-for-like sales for the year are expected to rise by 9%, with an 11% increase in the UK and an 8% increase in the rest of Europe.

Primark is committed to expanding its store presence and has opened new stores in the US, France, Spain, Poland, and Romania. By the end of this financial year, the company will be trading from 432 stores, occupying a total selling space of 18.2 million square feet. This represents an increase of 1.1 million square feet, despite a slight reduction in selling space in its German estate.

Primark’s digital initiatives are also progressing well, with the company expanding its click & collect trial to new stores and introducing new womenswear for the season. The retailer’s collaborations with celebrities and influencers continue to drive success, and a new international fashion collaboration will be announced later in the day in New York.

However, there are some challenges on the horizon for Primark. The company expects a weaker adjusted operating profit margin in the second half of the financial year due to higher-than-expected stock loss across its stores and modest German restructuring costs. The company now estimates that the second half’s adjusted operating profit margin will fall slightly below 8%, with the full financial year’s margin estimated to be around 8%.

Despite these challenges, Primark remains a major player in the fast-fashion industry and continues to expand its presence in the UK, Europe, and the US. With its focus on affordable, on-trend fashion and its ability to navigate changing market conditions, Primark is well-positioned for continued growth and success in the future.

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