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Primark owner Associated British Food (ABF) has revealed that Primark sales rose 17% to over £9bn, for the year ended 16 September 2023.
Despite this, the company saw its adjusted operating profit drop 3% to £735m and its adjusted operating margin drop to 8.2%.
The company put this down to “selective price increases” to protect profitability, while stating its sales increases “exceeded expectations”.
However, Primark’s operating profits shot up 30% to £717m and the company believes its margin is “now moving back to its historic levels”.
The results were assisted by strong performance from new store openings which took the company to over 430 stores up from 408 last year.
Robyn Duffy, senior analyst for Consumer Markets at RSM UK, added: “Primark’s results speak to their unique place in the market and its ability to navigate inflationary pressures which peaked early in the financial year and which characterised the trading period of these results. By selectively implementing price increases across certain ranges, the business has avoided alienating their core audience who go to the brand looking for value, whilst also allowing the business to conserve margin.
“Cost-of-living pressures have created a greater emphasis on value for Primark’s customers, leaving the business well placed to meet heightened demand across both its own audience and a broader base of consumers eager to trade down to better value options.”
She added: “In terms of digital transformation, the brand continues to explore its ‘click and collect’ model; most recently expanding operations to womenswear. The business is now benefiting from this increased in store footfall. It’s stayed true to its core and closely aligned its digital expansion to its stores. Again, indicating that despite a shift into digital exploration, stores will be the primary driver for Primark’s sales performance going forwards.”
