Well-performing sugar businesses and retail sales are likely to generate strong profits for Primark parent company AB Foods in the coming months. Despite a challenging economic environment, the operating margin will recover strongly, Associated British Foods said in London on Tuesday.
In addition, the 2022/2023 financial year ending on September 16th will probably be a little better than expected. Management pointed to increasing sales of food and clothing, primarily thanks to increased sales prices. But the weaker US dollar and lower freight costs are also providing tailwind.
AB Foods shares rose on Tuesday. It has already increased by around 27 percent since the beginning of the year.
The full year 2022/2023 (until mid-September) will probably end a little better than previously expected, the statement said. The company had previously forecast a slight increase in adjusted operating profit, after around 1.4 billion British pounds in the previous year.
Like-for-like sales in the fourth quarter rose by eight percent at Primark. The cheap fashion chain accounts for the largest share of the British group’s profits. In the new fiscal year, gross margin is expected to improve thanks to lower material and freight costs, AB Foods announced.
In June, AB Foods had already raised its forecast because consumers are currently accepting the increased prices in the face of inflation. For example, Marks & Spencer had already reported good business in recent weeks. Similar news is also expected from Zara parent Inditex when the Spanish clothing group presents its figures on Wednesday. (dpa)