Primark Q4 sales miss target as UK's self-isolation rules take toll

Primark parent company AB Foods has reported lower than expected fourth-quarter sales at the fast-fashion giant as Covid restrictions continued to impact business.

In its pre-closing trading update for the year to September 18, the company said it expects fourth-quarter like-for-like sales to be 17 percent lower than the same period two years ago - or pre-pandemic levels.

The company cited “the rapid and significant” increase in the number of people required to self-isolate in the UK following contact tracing alerts in June and July. It said a drop in footfall linked to consumer concern about those measures also affected the business.

But once the self-isolation rules were eased in early August, Primark said it saw a “consistent improvement” in like-for-like sales over the period from a decline of 24 percent in the first four weeks of the quarter to a decline of 8 percent in the last four.

H2 sales expected to reach 3.4 billion pounds

Meanwhile in Continental Europe, like-for-like sales were impacted by Primark's stores in Spain and Portugal, with both markets suffering a decline in tourism footfall. Like-for-like sales for the two markets showed a decline of over 30 percent for the quarter compared to two years ago.

And there was also a decline in footfall in France linked to the new requirements for vaccine passes.

Like-for-like sales in the US, excluding the Boston Downtown Crossing store which has been downsized, were 3 percent ahead of the same period two years ago.

Primark sales in the second half of the year are expected to come in at 3.4 billion pounds, including trading from the 53rd week.

The company also said it expects its full-year adjusted operating profit, stated before repayment of job retention scheme monies, to be ahead of 2020 levels.