Retailer Sees Encouraging Trade After Lockdown

  • Primark sales plunged by 75% to £582m in Q3
  • ABF estimates adjusted operating profit between £300m-£350m for the full year
  • Stores closed due to COVID-19 led to a £650m/month loss
  • Primark reopened 179 stores on June 15, with 367 open as of July 2
  • Cumulative sales for the seven weeks ended June 20 were £322m, down 12% YoY
  • Trading in reopened stores is ‘reassuring and encouraging’
  • Sales in England and Ireland ahead of last year’s week
  • City center stores affected by lack of tourism and lower commuter footfall

Primark’s sales took a massive hit during the pandemic, with Q3 sales plunging by 75% to £582m and year-to-date sales falling by 27% to £4.3bn. Its parent company, Associated British Foods (ABF), now expects its adjusted operating profit to be between £300m and £350m for the full year, down from last year’s £913m. The closure of all 375 stores led to a sales loss of £650m per month. However, during the closure, the group managed to reduce operating expenses by over 50%, limiting cash outflow to £100m monthly. ABF reported that stores have reopened more quickly than expected, with 179 stores opening on June 15 and 367 open as of July 2. Since the first stores reopened on May 4, cumulative sales for the seven weeks ended June 20 were £322m, down 12% compared to the same period last year. Trading in England and Ireland was ahead of the previous week. ABF stated that most regional stores are performing well, while city center stores face challenges due to reduced tourism and lower commuter footfall. The company now expects to return to cash generation in its final quarter.

Factuality Level: 8
Factuality Justification: The article provides accurate and objective information about Primark’s sales performance during the pandemic, including specific numbers and details about store closures, reopenings, and overall trading. It also includes quotes from the company regarding their expectations for future cash generation.
Noise Level: 3
Noise Justification: The article provides relevant information about Primark’s sales decline and the impact of store closures due to COVID-19. It also discusses the company’s cost-cutting measures and the reopening progress. However, it lacks in-depth analysis or exploration of long-term trends or consequences for the industry.
Financial Relevance: Yes
Financial Markets Impacted: Primark’s sales and operating profit impact financial markets and its parent company Associated British Foods (ABF)
Financial Rating Justification: The article discusses the significant drop in Primark’s sales and adjusted operating profit estimates, as well as the company’s efforts to reduce expenses during store closures and reopening. This information is relevant for investors and financial markets as it affects the performance of both Primark and its parent company, Associated British Foods.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Extreme Rating Justification: There is no mention of an extreme event in the last 48 hours.

Reported publicly: www.retailsector.co.uk