Primark Profits And Sales Hit By Mild Winter

Fashion retailer Primark has posted a fall in half-year like-for-like sales for the first time in more than a decade as well as a drop in profits, amid mild winter weather.

Owner Associated British Foods said the clothing business saw a sales fall of "less than 1%" in the 24 weeks to 27 February.

Half-year operating profit at the chain was down 3% to £313m though revenues climbed 5% to £2.67bn amid continuing store openings.

ABF cheered investors as it revealed an encouraging start to its US expansion. Shares (Berlin: DI6.BE - news) rose.

In March, the group had said a mild winter saw Primark endure a tough Christmas period but that sales had since fought back. Warmer winter weather tends to bring down demand for products such as knitwear and coats.

Announcing half-year results, ABF chief executive George Weston said: "Trading was weaker in the weeks leading up to and over Christmas, as a result of unseasonably warm weather across northern Europe."

He added that France had seen strong like-for-like sales growth a year after a bumper performance in its first year of trading in the country, while difficulties linked to expansion in Germany and the Netherlands eased.

"Early trading at our two stores in the US has been encouraging with very positive feedback," Mr Weston said. Footfall and sales in the US had increased steadily as awareness of the brand had started to increase "which started at a low level".

Six new stores were opened in the period - including a flagship site in Madrid - taking the total to 299 and ABF said the pace of expansion would accelerate in the second half.

The wider group - whose businesses range from sugar to groceries products such as Twinings and Ryvita - saw half-year pre-tax profits climb 4% to £466m on revenues down 2% to £6.1bn.