Primark (LSE: ABF) 1H17 Results: Sharp Operating Margin Erosion and Lackluster Comps

Executive Summary

• Associated British Foods reported 1H17 results for the 24 weeks ended March 4, 2017. This report focuses on results for Primark, the company’s retail division.
• Primark reported that its 1H17 revenues increased by 21% year over year, to £3,222 million. In constant currency, the company’s sales increased by 11% year over year. Primark increased its selling space by 12% year over year in the first half.
• Total comparable group store sales increased by 1% year over year, except in the Netherlands, where comparable store sales declined. UK comparable store sales increased by 2% year over year.
• Primark’s 1H17 operating profit declined by 2% at constant exchange rates and its operating profit margin contracted by 170 basis points year over year, to 10.0%.