Primark expects boost from weak dollar after sales drop in warm autumn weather
A weak dollar will boost Primark's buying power and help lift the chain's second-half profits, owner Associated British Foods (ABF) has predicted.
The retail chain, which has eight stores in Northern Ireland, said the improvement will come on the back of a lacklustre performance during the first half of ABF's financial year, with like-for-like sales expected to be down 1% of the period.
The chain is to close its Lisnagelvin store in Londonderry in April. ABF also owns Neills Flour in Belfast.
Primark said its sales were curbed by warm weather in October.
However, following that spell of unseasonable weather, Primark's like-for-like sales improved, and the chain also posted record sales in the week before Christmas.
Overall sales at Primark for the first half of ABF's financial year are expected to be 7% ahead of the £3.2bn it notched up in the first half of the 2017 financial period. The Primark chain made a £323m operating profit in that period.
The chain accounted for 54% of ABF's £1.36bn operating profit in the last financial year, and 46% of its £15.3bn in revenue.
"We expect an acceleration in Primark profit growth in the second half as a result of an improvement in margin over the same period last year," noted ABF in a trading statement.
"This will be driven by better buying and some benefit of the recent weakness of the US dollar on purchases which will more than offset an expected return to a more normal level of markdowns, compared to the very low level achieved last year."
ABF said that Primark is performing very well in the UK, with sales 85% ahead of last year, while it has also increased its share of the total clothing market there.
The group said that its Primark business in the United States "continues to make progress".