Annual results from Primark’s parent company on Tuesday showed that the budget fashion retailer remains one of the stronger names on high streets in its domestic market and globally.

Associated British Foods reported for the 52 weeks to 14 September with group revenue up 2% to over £20 billion. But within that, its retail ops (that is, Primark) saw revenue growth of 6% constant currency to £9.448 billion. Its total like-for-like (LFL) sales grew 1.2%.

Primark’s adjusted operating profit rose 51% to £1.108 billion and operating profit was up 53% at £1.1 billion. Its return on average capital employed jumped to 18.7% from 12%.

The company said its sales rise reflected “a strong performance across our key growth markets, including the US, France, Spain, Italy and Central and Eastern Europe (CEE), as well as growth in our largest market, the UK. 

“We continued to benefit from the relevance of our great-value clothing and the expansion of our offering. We are also successfully executing our store rollout programme across the US and Europe, which is adding profitable new selling space”.

Womenswear strength

Most of its key categories performed well in the year as it “continued to deepen and broaden our product offering in women’s, men’s and kidswear, while growing our presence in categories such as home and accessories”.

It saw particular womenswear strength in performance and leisurewear, knitwear and nightwear. Its collaboration ranges, including Rita Ora and Paula Echevarría, “contributed strongly” and it benefitted from continued expansion of the Edit collection, its “more premium” essentials range. 

But it wasn’t all good news as the wet weather in the UK and Ireland in H2 meant seasonal summer clothing, as well as footwear, beachwear and swimwear, were negatively impacted.

Menswear delivered “good growth, with particularly strong sales of leisurewear and shirts”. It was boosted by its expanded product range, including premium collaborations via its Kem collection and LA workwear brand, The Stronghold. Licensed sportswear lines with the NBA, NFL and Kappa also did well. 

In kidswear, sales of its licensed ranges, including deals with global names such as Disney, the NBA and gaming brands, performed “very strongly”. 

Markdowns “were managed effectively and we exited the year with good inventory levels”.

UK weather woes, but Europe and US boom

Looking geographically, the company said that in the UK and Ireland, which accounted for 47% of sales, they grew 2%, or only 0.7% LFL, reflecting 3.1% growth in H1 and a 1.6% decline in H2. 

While wet weather was an issue, it has seen a “very encouraging start to sales” for AW24, with strong LFL growth in both markets in the last weeks of the financial year. 

For 2024 as a whole, LFL sales in the UK alone grew 1%, reflecting 3.6% growth in H1 and a 1.3% decline in H2. Primark maintained its market share in the UK at 6.7%. 

It continued to expand the store portfolio in the UK and Ireland and is also now offering a click & collect service in 87 UK stores with this to be available in all stores in England, Wales and Scotland by tend-2025.

In Spain and Portugal, which accounted for 17% of turnover, sales grew strongly, up 6%, or 4% in H1 and 7% in H2. Growth in Spain “reflected the sales contribution from space expansion and good execution”. It continued to outperform the market. 

But in Portugal, sales in H1 were impacted by market challenges, followed by an “encouraging improvement” in H2. 

In France and Italy, which accounted for 16% of sales, it saw some of its strongest growth, with sales up 12% in the year, or 18% in H1 and 8% in H2. Growth includes a strong contribution from new stores and it continued to gain share in both markets

In its newer markets in Central and Eastern Europe, which accounted for 3% of sales, they grew a massive 42%. It opened three new stores in the year, including the first in Hungary, one in Poland and one in Romania.

In its Northern European markets, Germany, the Netherlands, Belgium and Austria, which accounted for 13% of sales, they grew 3%, reversing the trend of other regions with H1 only up 1% but H2 up a stronger 4%. LFL sales rose 6.1%.

Its earlier German restructuring contributed to strong LFL sales in its remaining stores, with “much-improved sales densities and profitability, despite industry-wide strike action”. 

And in the US, which accounted for 5% of sales, they grew 30% as it opened more stores, expanding in Florida and entering Virginia, North Carolina and Michigan.A new distribution  centre in Jacksonville, Florida will support its continued expansion in the US. 

Sales in the year were driven by both womenswear and menswear, with licensed products performing particularly well. Primark recently launched its first US marketing campaign in the New York metro area as it focuses on increasing brand awareness with US customers. 

And it continues to execute its store rollout programme, with 14 leases for new stores now signed, including its first in Manhattan, New York, which will be its 11th store in New York state.