Primark expects higher profits despite weak summer

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After a strong recovery earlier this year, Irish fashion chain Primark has had to cope with disappointing sales over the summer months, primarily due to the health crisis. The retailer also faces supply chain delays.

 

Covid certificate

The chain had posted excellent figures for the third quarter of its broken financial year, but sales fell by around a quarter over the summer months. As a result, sales for the full fourth quarter (ending on 18 September) are expected to be 17 % lower than two years ago, the retailer warned.

 

One of the causes is the so-called 'pingdemic' in the United Kingdom: a large number of people had to go into self-isolation after having received a message ('ping') from the National Health Service app saying they may have had contact with an infected person. Elsewhere in Europe, Primark stores also saw a drop in customers due to travel restrictions and the introduction of a Covid certificate in France.

 

However, lower sales will not lead to lower profits, Primark said. On the contrary, operating profits will be higher thanks to cost reductions. The company also keeps lower stocks, but does report disruptions in the supply of its winter collections. As is known, there are currently capacity issues with shipping containers for ocean freight. However, this will not result in empty shelves: the delays should be at most a few weeks.