Associated British Foods said that sales at its Primark fashion business over the 16 weeks to January 8 were up 36% compared to last year on a constant currency basis despite the rapid spread of the Omicron coronavirus variant hitting customer numbers in December.
It said it was now seeing a recovery in UK and Ireland footfall. It trades as Penneys here.
AB Foods said Primark's sales in the 16-week period on a like-for-like basis improved compared to the final quarter of its 2020-2021 financial year, while its operating profit margin was ahead of its expectations.
Primark has about 400 stores in Europe and the US but does not trade online.
It said all its stores remained open throughout the period, except for short periods in Austria and the Netherlands. Last Christmas its shops weres largely closed due to Covid lockdowns.
Meanwhile, around 400 jobs are set to be cut across Primark's UK stores as the group looks to overhaul its retail management team.
The retailer said it had launched a consultation with staff as part of plans to simplify its UK store retail management structure.
It is looking to make the management structure consistent across its estate of over 190 stores in the UK.
While it is creating a new management level role as part of the move, it expects the changes to leave it with around 400 fewer retail managers.
AB Foods also owns major sugar, grocery, ingredients and agricultural businesses.
Revenue in these businesses were in aggregate 6% ahead of last year on a constant currency basis.
Sugar revenue was driven by strong European prices while its ingredients revenue was buoyed by a recovery in volumes from Covid-19 affected levels last year.
The group said all businesses have experienced inflationary pressures in raw materials, commodities, supply chain and energy.
That has impacted margins in grocery and ingredients where price rises have lagged the effects of input cost inflation.
AB Foods maintained its guidance for "significant progress", at both the half and full year, in adjusted operating profit and adjusted earnings per share.
Primark will not raise prices for its spring/summer range despite inflationary cost pressures, the finance chief of its owner Associated British Foods said today.
"Primark prices for the consumer will remain where they are," John Bason told Reuters. "It's locked and loaded."
Rival Next has flagged price rises of 3.7% in the first half of 2022 and 6% in the second half due to higher freight rates and increased manufacturing costs.
Marks & Spencer has also indicated price rises are coming.
Bason said the UK government's move this week to lift Covid-19 restrictions for England had improved the outlook for Primark as more people would return to city centre workplaces and think more about overseas holidays.
"In the UK and Ireland I think we're looking at an improving consumer outlook on the back of the Omicron infection rates coming down and I think it will be underpinned by those COVID restrictions being lifted yesterday," he said.
