Primark back on front foot as cold snap boosts sales

Primark was hit by the warm weather in the run-up to Christmas, but because it had fewer coats, hats and scarves on its shelves, it managed to make up all the shortfall in sales in January without massive discounting.

That helped owner Associated British Foods to push up its outlook for the year to just a “marginal” decline in earnings, against the “modest” decline it talked about in December.

The group also now expects the dent in profits from the move in the pound against the euro to be £10 million rather than £25 million after sterling’s recent weakness.

“This a pretty reassuring update,” said finance director John Bason. “Primark has caught up, the outlook for sugar is more positive, and grocery margins are improving.”

Primark sales for the six months to the end of this week are set to be 7.5% ahead of last year, mainly driven by extra selling space.

Bason said sales from the first two US stores, opened before Christmas, had been encouraging. Another six will open this year.

Shares rose 57p to 3312p.