AB Foods lifts guidance again as Primark recovers

12th Sep 2023 07:03

(Sharecast News) - UK conglomerate Associated British Foods lifted annual guidance again boosted by recovery at its Primark retail chain and strong performance from food operations.

AB Foods said it now expected full-year adjusted operating profit to be "slightly better" than previous guidance, when it said earnings would be "moderately ahead" of 2021/22's £1.43bn.

Primark like-for-like sales growth for the financial year is now tipped to be around 9%, with like-for-like sales likely to be around 7% in the second half. For the financial year as a whole, sales are forecast to be around 15% ahead year on year, it added.

"These higher sales are the result of limited and carefully selected price increases through this financial year to partially recover high levels of input cost inflation, assisted by a strong performance from new stores opened in the year, and by demand for our attractive ranges," the company said.

However it said adjusted operating profit margin would be weaker in the second half due to higher-than-expected stock loss from stores across its estate and a modest amount of German restructuring costs, coming in at slightly below 8% and the same figure for the full financial year.

Reporting by Frank Prenesti for Sharecast.com