Warm autumn cools Primark sales

Primark has shown it is not immune from the chill blowing through the retail sector after trading was hit by the unseasonably warm autumn.

The discount clothing chain, which recently toasted a ”magnificent” year with sales of nearly £5bn and a 29% rise in profits, achieved like-for-like sales below the expectations of its owner, Associated British Foods.

The weather conditions, which have also affected rivals such as Next, were blamed for the disappointing performance, although AB Foods said store expansion meant total sales were still up 10% over the past two months.

Primark’s profit estimate for the year to September was also unchanged because the company budgeted for a higher level of mark-downs this year.

The chain’s rapid expansion over recent years has given it 278 stores in nine countries, including 164 shops in the UK. It is planning an increase in store space of one million sq ft in the current financial year, having grown to 10m sq ft – seven times the size of its entire footprint in 2000.

Primark’s on-trend ranges have made it a winner in the sector in recent years, with analysts praising its ability to mix low prices with high fashion.

Today’s update on current trading came during AB Food’s annual meeting, when shareholders were told operating profits for the group were broadly in line with expectations for the first two months of the financial year.

The FTSE 100-listed conglomerate, which employs 118,000 people in 47 countries, also has operations in sugar, agriculture, grocery and ingredients. Brands include Ryvita, Ovaltine, Silver Spoon, Kingsmill and Patak’s.

Shares in AB Foods fell by 4% at one stage today.

Charles Stanley analyst Rae Ellingham said: “The announcement may serve as a reminder to investors that consistent growth at Primark is not guaranteed and we remain concerned at the high valuation being applied by investors.”