Primark Holiday Season Sales Exceed Expected Growth Of 4% To Stimulate The Surge In Stock Prices Of Parent Companies

British cheap fast fashion retailer Primark Stores Ltd. surpassed the expected holiday season sales performance to stimulate the parent company Associated British Foods PLC (ABF.L), the British Union food group (ABF) share price rose sharply to 7.1% to 2333 pence on Thursday.

ABF said Primark Stores Ltd. sales increased by 4% in the first 16 weeks of January 5th, compared with a slight decrease of 0.8% over sales, but the sales generated by the new retail area were enough to offset. More importantly, ABF said it had contributed more than half of sales and profits to the group, and the first quarter business profit margin has increased and profits have also increased.

John Bason, chief financial officer of ABF, pointed out that retailers were generally challenged before Christmas and before the end of the conference, but this group of data shows that Primark has emerged as a winner.

Previous Market Research said that retail sales in Britain were the worst performance since the last financial crisis in 2008, regardless of clothing retailers, department stores and even the largest online retailer ASOSPLC (ASC.L).

ABF said that British sales of Primark Stores Ltd. during the Christmas season were better than expected, and the comparable sales growth in 9-11 months also made up for the passenger traffic which declined in November due to warm winter and "black five".

In the context of market contraction, the brand's first quarter sales increased by 1% annually, and the market share of local clothing increased significantly.

John Bason believes that the reason they beat their peers is investment in stores and low pricing.

From the retailers who have announced the performance of the holiday season, it is easy to win the market for brands with low consumption of young people, such as Primark, and Boohoo and PrettyLittleThing platforms such as the BoohooGroup PLC (BOO.L) of the online retailer, which, according to the expected performance of the holiday season's revenue growth of 44%, announced this week that the annual sales growth outlook will be increased from 38%-43% to 43%-45%.

The euro area sales of fixed exchange rate Primark Stores Ltd. increased by 5% compared with the same period last year. France, Belgium and Italy were particularly strong, and the second largest market of the brand - Spain's performance increased, but Germany continued to be weak.

Sales in the United States also improved significantly. The group mentioned in particular that the New York branch of Broolyn, which opened last July, was "very strong".

As of January 5th, Primark Stores Ltd. had 364 stores, with sales area increased from 14 million 200 thousand square feet in the same period last year to 15 million 100 thousand square feet. During the first quarter, the sales area increased by 300 thousand square feet, accounting for 1/3 of the annual target.

Robert Waldschmidt, an analyst at Liberum, believes that continuing store expansion can help Primark Stores Ltd. continue to increase the market share.

As the EU deadline for March 30th is getting closer, John Bason says that Europe will not have a significant impact on Primark Stores Ltd., because their products will directly enter the UK or EU 27 country market after purchasing from Southeast Asia, and do not rely on the trade between the UK and the EU 27 countries.

At the same time, he warned that there was no agreement to be "hasty and reckless". ABF also had huge sugar, food and beverage, agricultural and raw materials businesses, and its brands include Twinings, Chuan Ning, Ovaltine, A Hua, etc.

Associated British Foods PLC (ABF.L) reported a 2178 pence on Wednesday, with a 20.9% decline in the past 12 months.