Primark owner Associated British Foods (ABF Foods) has seen its shares dive in early trading after it announced that the closure of its European stores due to coronavirus could leave a hole of £190m in sales.
Shares in the company dropped by 100% this morning (16 March) to £0.01p per share, despite it also announcing that adjusted operating profit could be ahead of previous expectations.
In the update, ABF revealed that stores in Italy, France, Spain and Austria, accounting for 20% of its retail estate, have now closed.
These stores currently generate 30% of Primark’s sales, which it anticipates would have generated around £190m over the next four weeks. The remainder of the estate, including the UK which represents 41% of sales, has seen like-for-like sales declines over the last two weeks.
It added that this trend has “accelerated” over the past few days as a result of reduced footfall. ABF said it is managing the business appropriately but does not expect to “significantly mitigate” the effect of the contribution lost from these sales.
“Given the effect of COVID-19 on Primark’s sales, it is too early to provide earnings guidance for the remainder of the current financial year.
“The group has a strong balance sheet, substantial cash liquidity with some £800m of net cash at the half year and significant undrawn bank facilities,” it said.