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Primark Misses Q4 Expectations

Primark Misses Q4 Expectations

Primark Misses Q4 Expectations

Primark saw Q4 sales below market expectations with public health measures taken to control the spread of the COVID-19 Delta variant hurting its business.

“In the UK our sales were affected by the rapid and significant increase in late June and early July in the number of people required to self-isolate following contact tracing alerts, the pingdemic,” Primark said.

Associated British Foods, the British fast fashion retailer’s parent company, noted that comparable sales in Q3 were 3 percent higher than two years ago thanks to strong trading in European region and the U.K. where stores had reopened. However, the company’s comparable sales for the quarter ending September 18 are expected to be down 17 percent on two years ago.

The retailer saw significant improvement in sales as the quarter progressed, Reuters reported. The company’s weekly comparable sales were down by 24 percent at the start of the quarter, but in the last few weeks they have just been down 10 percent.

While the retailer is set to miss market expectations, Associated British Foods has still raised its profit outlook for the full 2020-21 period. This is indicative of strong profit margins, resulting from a significant reduction in labor and store operating costs, as well as improvements in its food and sugar business.

Shares of Associated British Foods dropped by 3 percent on Monday morning.

Primark is also currently experiencing supply chain delays in delivering some of its autumn/winter stock due to “port and container freight disruptions.” However, the company remains bullish about the upcoming holiday season.

“At this time of year Primark’s inventory does go up as autumn and Christmas is so big,” said John Bason, the finance director at Associated British Foods. “We have a lot of stock arriving. We have seen some disruption in the supply chain, some of it is delayed by a few weeks. We are not having a problem with stock on the shelves. I don’t think we will have one, at this important time it is just arriving some weeks late.”

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