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AB Foods sees first half ‘strongly ahead’ of prior year on improved Primark

// AB Foods said Primark sales for the 24 weeks to March 5 were expected to be well over 60% ahead of last year
// AB Foods outlook for the full year was unchanged with “significant progress” expected in both adjusted operating profit and adjusted earnings per share

Associated British Foods has reported that its first-half sales and adjusted operating profit are “strongly ahead” of the previous year and ahead of pre-COVID 19 levels, reflecting an improved performance from its Primark fashion business.

Sales at value fashion giant Primark surged 60% year on year in its first half – when stores remained open, in contrast to Covid closures the previous year.

The better outcome reflected all Primark stores remaining open and trading throughout the period except for short periods in Austria and The Netherlands.

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AB Foods said the effect of inflation on raw materials and the supply chain in Primark in the first half was broadly mitigated by a reduction in store operating costs and overheads.

Back in January the group revealed it would not raise prices for spring/summer.

The group also owns major sugar, grocery, ingredients and agricultural businesses and said all its food businesses had experienced increasing inflationary pressures in raw materials, commodities, supply chain and energy.

It has taken steps to offset these higher input costs through operational cost savings and where necessary but cautioned that actions on price inevitably lag input cost inflation.

As a result, it expects some margin reduction in these three businesses at the half year but expects a recovery by the financial year-end.

AB Foods outlook for the full year was unchanged with “significant progress” expected in both adjusted operating profit and adjusted earnings per share.

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The post AB Foods sees first half ‘strongly ahead’ of prior year on improved Primark appeared first on Retail Gazette.



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