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Primark (AB Foods) rises 4% despite selling 75% less: "They know that the customer will return"


Primark (+ 4%) has sold 75% less between March and June due to the crisis in coronavirus. The company, owned by the British AB Foods, It also anticipates a 60% drop in its adjusted operating profit by 2020. Despite everything, it is confident in the recovery supported by the return of customers.

Textile revenue in the first nine months of its fiscal year has fallen 27% to £ 4,292 million. Every month their stores have been closed, Primark has lost £ 650m.

At the same time that its income was reduced to zero by the forced closure, the net outflow of money between March 1 and May 23 has been an incessant trickle for the company, which has been forced to pay some 800 million pounds, mainly to its suppliers and to cover operating expenses.

"Despite generating some criticism, his decision to stop his requests in the face of confinement has allowed him to save costs," say experts from Team Spirit. "The company is also committed to paying for those finished or in-transit orders and those for the fall / winter season, which can exceed £ 1 billion, have already been launched," Apostille.

Shore Capital Markets reiterate their advice to 'buy' from AB Foods taking into account "its high-quality business and strong brand portfolio supported by cash generation and good asset investment worldwide."

The latest Primark figures coincide with the inauguration of its flagship store of more than 7,000 square meters in the heart of Barcelona, ​​Plaza Cataluña.

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