Primark profits rise by 51% to £1.1bn in FY24
Owner Associated British Foods revealed that there was a “significant” increase in adjusted operating profit, up 51% to £1.1bn
Primark has seen its operating profits soar by 51% to £1.1bn in the year ended 14 September 2024, as the group hailed a “substantial” improvement in profitability and strong returns amid ongoing investment.
Associated British Foods reported that sales for the group rose by 6% to £9.4bn over the year, despite summer clothing sales being hit by wet weather during H2.
Overall, retail sales for the group performed well across key growth markets, the US, France, Spain, Italy and Central and Eastern Europe, as well as growth in our largest market, the UK.
In the UK and Ireland in particular, which accounted for 47% of total sales, they grew 2%, with like-for-like sales growing 0.7%, reflecting 3.1% growth in H1 and a 1.6% decline in H2. In both markets, challenging weather impacted footfall during H2, particularly in April and June.
However, the retailer had a “very encouraging” start to sales of our Autumn/Winter ranges, with “strong” like-for-like growth in both markets in the last weeks of the financial year.
For 2024 as a whole, like-for-like sales in the UK grew 1%, reflecting 3.6% growth in H1 and a 1.3% decline in H2. Primark also maintained its market share in the UK at 6.7%.
During the year, the group continued to expand and optimise its store portfolio in the UK and Ireland. In total, it has opened three new stores and in the UK, it also extended two existing stores, right-sized one store and relocated two stores.
Primark is now targeting mid-single digit sales growth in 2025 as it continues to roll out its store programme in Europe and the US and to focus on like-for-like sales growth in its more “mature markets”. The group expects adjusted operating margin to remain “broadly in line” with this year’s level.
George Weston, chief executive of Associated British Foods, said: “This was a year of very strong financial and operational progress across the group. We delivered a substantial improvement in profitability, excellent cash generation and strong returns as a result of consistent, multi-year investment and a return to some normality in our markets and supply chains.
“Primark achieved good sales growth this year and I am particularly pleased with the significant recovery in margin. Our low-cost model is as strong as ever, as we maintain our relentless focus on delivering great-value clothing and a unique store experience. This is underpinned by a step up in investment in strategic initiatives across digital, product and brand. Significant white space for new stores remains across Europe and the US, which we expect to help drive sustainable growth over the medium and long term.”
