The Retail Business Of The Cheap Clothing Brand Primark Is Regressive.

Primark stores

In April 19th, sales improved in the two quarter, pushing Ireland cheap.

Retailer Primark's growth in mid term revenue was 4.7%, but the strong dollar's pressure on procurement costs still led to a contraction in operating profits.

In the first half of fiscal year 2016 as of February 27th, Primark adjusted profit fell by 2.8% to 313 million, compared with 322 million last year and 1% after the exchange rate.

The operating margin also decreased by 90 basis points to 11.7%. The group pointed out that the decline was milder than expected, because most of the impact of the US dollar appreciation was offset by good procurement performance and inventory management.

On the other hand, the logistics offices and warehousing costs of the two stores currently operating in the US have also reduced profit margins.

In September 2015, Primark landed on the east coast of the United States and opened its flagship store in Downtown Crossing, Boston.

The parent company, Associated British Foods PLC (ABF.L), a group of agricultural, food and retail conglomerates in the United Kingdom, said that the performance of the two Boston stores has been encouraging.

The series or cheap retail concept is very popular. Passenger flow, sales density and brand awareness are increasing. The United States will add 6 more stores this year, that is, a total of 400 thousand square feet of retail area. It will focus on the opening of the end of the fiscal year, and plans to open ninth stores in New Jersey in fiscal 2017.

The new retail area in the US and other markets supports Primark, which has risen from 2 billion 547 million pounds in the same period last year to 2 billion 667 million pounds, or 7% after the impact of the exchange rate, slightly below the 7.5% expected by the group.

The same store recorded a decrease of less than 1%, which is also unchanged from the group's forecast in the same period last year.

According to the no fashion Chinese data, Primark, like the other retailers, lost to the warm winter weather that swept Europe during the Christmas holiday season. Only 3% of sales growth and 7% of fixed exchange rate sales grew, but sales began to improve in January.

In the European market, the group pointed out that the sales performance of the same store in France was strong, and the impact of new stores on sales of old stores in Germany and Holland has eased.

In the first half of the fiscal year, the group increased the retail area of 300 thousand square feet. As of February 27th, there were 299 stores covering ten markets.

In mid March, with the opening of Chester Broughton Shopping Park store in Chester, the total number of Primark stores reached landmark 300.

In April 14th, the brand entered the tenth international market more formally. Italy opened its flagship store outside Milan, the fashion capital. This autumn and 2017, Primark will enter Brescia and Florence.

Although the retail business of Primark is regressive, the recovery of sugar industry helps Associated British Foods PLC to achieve the medium-term adjusted operating profit beyond market expectations.

The figure increased by 2.5% to 486 million pounds over the same period last year, slightly higher than the market expectations of 480 million pounds, excluding the increase in the exchange rate after the increase of 5%.

Group income totaled 6 billion 117 million pounds, an annual decline of 2.1%, excluding the impact of the exchange rate increased by 2%.

Net debt fell to 421 million pounds year-on-year, and the group raised its interim dividend level by 3% to 10.3 pence per share.

Associated British Foods PLC will remain unchanged for the whole year, and EPS will only be slightly lower than the 102 pence in fiscal year 2015, rather than the expected "moderate drop", and the market is expected to be 100 pence.

In fiscal year 2015, Primark contributed 42% of sales and 62% of operating profit for Associated British Foods PLC.

Citigroup Inc. (NYSE:C) Citigroup analysts believe that Primark has proved its viability in the international market, so it is expected that the brand will have long-term profit growth.

Liberum analysts also predict that Primark sales and profits will double in the next 5 years.

Associated British Foods PLC (ABF.L) on Tuesday increased by 2.8% at most, and the market closed at 3347 pence on Monday, up 15.2% over the past 12 months.