Primark sales growth boosts profits for owner AB Foods
AB Foods expects full-year sales at Primark to rise 13 per cent on a constant currency basis, with the UK seeing particularly strong turnover growth of 10 per cent.
Like-for-like sales are forecast to come in 1 per cent higher at the fashion chain.
The retailer said that strong Easter trading helped drive sales, which meant less discounting.
“After a good first half, third-quarter trading was particularly strong in the lead-up to Easter, benefiting from comparison with prior year results that were affected by poor weather and an earlier Easter holiday.
“Favourable weather in the fourth quarter and the strength of our consumer offering resulted in markdowns at lower levels than normal,” AB Foods said in a trading update.
As a result the company, which also has a sugar and grocery business, said its outlook is “further improved” and adjusted operating profit will be “well ahead of last year”.
AB Foods – which generates revenue in Asia, Europe and the Americas and owns Twinings tea, Kingsmill bread and Silver Spoon – has also benefited from sterling’s collapse following last year’s referendum vote.
The group said the Brexit-induced collapse in the pound will see it benefit to the tune of £85 million this year.
However, AB Foods again noted that the British currency’s demise against the dollar has led to higher import costs at Primark, which meant its first-half profit margin falling.