Primark sales in the U.S. have grown 14% so far this year — 16% in Q3 alone — a sales surge fueled by an international expansion. In an earnings release Wednesday, the Irish apparel retailer noted “good execution across our key growth markets in Europe, the US and the Middle East.”
The company has stepped up its expansion in the U.S., with two more stores opening this month, following openings in states like Texas, Illinois, Florida and Tennessee. In May, Primark opened a New York City flagship, its 11th location in that state. Primark in its release Wednesday said the location “has started strongly and supports our focus on driving brand awareness.”
Store openings were a major factor in the retailer’s year-to-date growth in the U.S., especially given “ongoing volatility in tariff regimes and consumer sentiment," GlobalData apparel analyst Chloe Tedford-Jones said in emailed comments.
But without those added locations to feed its top line, the apparel retailer is showing signs of weakness, according to Tedford-Jones. Sales in Q3 rose 3% year on year, and new stores added 5% to the growth, the company said Wednesday. But comps fell more than 2%, as soft demand in the UK, Ireland and continental Europe dragged down results.
Several initiatives — including “a sharper product range,” improved pricing clarity, digital investments and expanded in-store pickup — “have helped stabilise growth,” according to Tedford-Jones.
But flatter year-to-date comps and other signs of weakness at the retailer “underscore the risks of a store-led model in a retail world increasingly dominated by online channels,” she said.
“While store expansion remains a vital lever for growth, reliance on expansion rather than underlying [comp] momentum highlights the vulnerability of weaker markets and the need for Primark to stimulate consumer demand through value messaging, sharper marketing, and deeper engagement,” she also said.
