Primark today reported a rise in revenues over the festive period as store expansion outweighed a fall in like-for-like sales.
The fashion retailer saw UK sales rise one per cent on last year in the 16 weeks to 5 January, defying a downturn in the wider retail market.
The growth was boosted by better-than-expected sales over the Christmas period, which masked a dip in like-for-like sales in November due to reduced footfall during a miserable Black Friday period for retailers.
The discount brand’s overall revenue was pulled up by a strong performance in Europe, with sales up five per cent on last year.
Growth was strong in France, Belgium, Italy and Spain, but sales suffered amid a challenging environment in Germany, the company said.
In a trading update posted by Primark’s owner, Associated British Foods (ABF), the firm said its retail selling space has increased by 0.3m square feet (sq ft) since the end of the financial year.
The Dublin-based fashion giant avoided the trappings of heavy discounting, which have slashed profits at other major retailers amid a frantic race to the bottom.
Primark said it has increased its profit margin and expects full-year profits to be in line with forecasts. ABF's share price jumped more than six per cent in early trading.
The retailer’s strong performance helped buoy poor trading in ABF’s sugar division, where revenue lagged 14 per cent behind last year.
AB Sugar said the poor sales in UK and Spain were the result of lower EU sugar prices for contracts negotiated at the end of last financial year.
But the company said its sales for this year show early signs of a recovery in prices.
Sophie Lund-Yates, equity analyst at Hargreaves Lansdown, said: “ABF’s crown jewel is still Primark, and it’s managing to shine through a pretty muddy high street environment.
“With brands from Debenhams to Superdry battling with a dwindling customer base, Primark’s doing well to stand firm – especially because it doesn’t have an online presence to rely on like the others.”