Primark and Boohoo next in line to reveal Christmas trading
Budget retail chain Primark has already warned trading was ‘challenging’ in the run-up to Christmas.
High street fashion giant Primark and online rival Boohoo will be among the next batch of retailers to report back on their festive fortunes.
Primark figures will be watched closely for how it has fared after it already warned trading has been “challenging” in the run-up to Christmas .
The update from owner Associated British Foods on Thursday will reveal whether it enjoyed a pick-up in the crucial Christmas weeks, given the boost seen by rival Next after a last-minute shopping rush.
We expect Boohoo to again emerge as a winner from a challenging trading period for both store and e-commerce apparel retailers Simon Bowler, Numis Securities
Retail analyst Simon Bowler at Numis Securities is predicting Primark to post a 2% fall in like-for-like sales.
This would come alongside 5% revenue growth, driven by expansion.
He said: “Following the cautious statement on November trading made at the AGM, we have assumed a pick-up in December, as seen with peer Next.”
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In November, AB Foods reported that like-for-like sales at Primark fell 2.1% in the year to September as bad weather weighed on trading in Europe.
In the group’s annual general meeting update a month later, it warned November had been “tough”, but stuck to its expectation for an increase in profits at Primark as a result of careful inventory management and improved margins.
Sophie Lund-Yates, equity analyst at Hargreaves Lansdown, said: “It’s been a prickly year for retailers, although the discount chain has bucked negative trends in the past.
“Given Primark’s track record, we think that can continue.”
Boohoo is set to leave rivals in the shade when it updates on Tuesday, with Numis pencilling in 38% growth in its third quarter, which covers the crucial festive season.
“We expect Boohoo to again emerge as a winner from a challenging trading period for both store and e-commerce apparel retailers, fuelled by the flexibility and speed inherent in their business model,” said Mr Bowler.
It comes after Boohoo booked a 50% rise in sales to £395.3 million in the six months to August 31, while pre-tax profit rocketed 22% to £24.7 million.
Christmas is unlikely to have been a cracker for embattled Simply Be owner N Brown, which reports on Thursday.
Mr Bowler is expecting total revenues to slam into reverse from growth of 1% in the first half to a 0.6% decline over the Christmas season.
Product sales are also set to remain in decline, having dropped 3.1% in the half-year.
“After a disappointing first half product performance, we expect trading will have remained difficult through the Christmas trading period,” said Mr Bowler.
N Brown recently lost a long-running dispute with the taxman at the end of a rocky year, which saw the abrupt departure of former chief executive Angela Spindler and an overhaul to close up to 20 stores.