Given its plan to open more store in different regions, Primark expects that its profits keep rising. Last year, Primark opened 16 new outlets for its fashion products in the United Kingdom, the United States, and Europe. With the new chain stores, the fashion company expected that its total sales would jump by 11% within 6 months (from October 2016 to March 2017).

Despite varied predictions, analysts agree that Primark performs pretty well. Associated British Foods said that there was no sign of declining trend. According to the Finance Director, John Bason, this increasing trend is related to the increasing disposable income among the UK consumers. Accordingly, fashion shopping is predicted to keep increasing.

Primark Is Facing More Challenging Situation

AB Foods said that even though its business stayed flat during the last several months, the company showed pretty good performance in terms of sales. That is why the company might expect increasing sale trend. To prove its successful performance, the company has set to open more stores in some countries, including Spain, London, Belgium, and the United States with three months to go.

However, the company’s sales are highly dependent upon the pound. When the Sterling falls down, its sale margins can be squeezed severely. As a matter of fact, sales account for almost half of Primark’s profits. Since the EU referendum in June, 2016, Sterling has showed weakening trend, as it fell by 16% against the US dollar and 10% against the Euro. As a result, imports to the United Kingdom became more expensive.

The good news is that Primark benefits from its keen pricing policy, which protects its sales. Nonetheless, the company has to make sure that its products remain relevant, fashionable, and appealing. Otherwise, the consumer may find other alternatives. Emerging players, such as Missguided and Boohoo, have posed more threats. They offer almost similar product lines. Unless Primark applies appropriate branding and marketing strategies, the new players may steal its customers and shares.

AB Foods: Primark Performed Pretty Well

Now, Primark is the biggest profit maker for AB Foods. The  Dublin-based company particularly targets tourists that hunt for fashion items in the tourist destination areas. Its main brands include Kingsmill bread, Twining tea, and Ovaltine. Last year, Twining tea made significant market shares in the United States, the United Kingdom, France, and Australia.

On the other hand, Ovaltine showed promising growth in developing markets, such as Brazil and Vietnam. It has also come into the markets in the Southeastern nations, such as Indonesia and Malaysia. The higher revenues were partly related to the increased productions and higher sugar prices in Africa. However, Primark’s shares in AB foods were showing slightly declining trend during the last 12 months.

However, all of these remain predictions. The first half of AB Foods’ financial period ends on Saturday. The group is set to release its first-half financial performance on April 19, 2017. The report will show whether the predictions are true or not. Of course, Primark is still optimistic about it since it has accounted for its sales from the newly opened stores and outlets.