Associated British Foods’ Primark reported a slowdown in sales growth in the first quarter, showing that even the most reliable fashion retailers aren’t immune to the rise of online shopping.
At constant currency rates, Primark’s sales rose 7 per cent in the 16 weeks to January 6th, the company said in a statement Thursday. That missed analysts’ estimates for growth of 10 per cent.
“Sales growth across Europe was held back by unseasonably warm weather in October,” the company said in the statement.
Primark's underwhelming sales will surprise investors, who were anticipating that the chain's rock-bottom prices would see it emerge as one of the winners of the holiday season. The report joins a raft of disappointing updates from fashion retailers such as Hennes and Mauritz, and Marks and Spencer, and will raise questions over whether Primark is missing out on growth without an e-commerce presence to complement its network of vast, brightly lit stores.
Despite difficult business in continental Europe, the retailer, which trades in Ireland as Penneys, said its same-store sales growth and market share gains in the UK were strong and sales in the US continued to make progress. ABF reiterated its expectation that adjusted operating profit and earnings would progress in the current financial year. - Bloomberg
