Primark hails a resilient performance

TV star Stacey Solomon models an 8 Primark jumper and 13 skirt

The firm said profits are "well ahead", despite a fall in like-for-like sales over its festive quarter.

The retailer saw a "modest decline" in like-for-like sales in the 16 weeks to January 5, although total sales rose 4 per cent as it opened more stores.

On a like-for-like basis, it said UK sales rose in September and October, but lower numbers of shoppers in its stores hit trade in November.

The group added that despite the overall modest decline in global like-for-like sales, profits were "well ahead" at Primark thanks to a higher operating profit margin.

Primark had previously warned that trading was "challenging" in the run-up to Christmas as like-for-like sales fell 2.1 per cent in the year to September as bad weather weighed on trading in Europe.

Its parent company Associated British Foods, which also owns a sugar business and grocery business including Twinings and Ovaltine, saw group-wide revenues rise 2 per cent on a constant currency basis in the 16 weeks.

Sugar revenues fell 12 per cent at constant exchange rates, and 14 per cent on a reported basis, after it was hit in the UK and Spain by lower EU sugar prices for contracts negotiated at the end of its last financial year.

Grocery sales rose 3 per cent at a constant currency and 2 per cent on a reported basis, while its agriculture and ingredients arm saw sales increase 5 per cent and 6 per cent respectively.

Tom Stevenson, investment director from Fidelity Personal Investing's share dealing service, said AB Foods had delivered a "sweet and sour" update.

He said: "Sugar is suffering from low European prices but that was well-flagged. Retail remains the star turn.

"Without a strong online business, AB Foods' Primark has to rely on under-cutting its fast fashion rivals to maintain its lead on the struggling high street."