Warm weather hits Primark sales growth

Associated British Foods said underlying sales at its Primark discount fashion chain were below expectations in the first two months of its 2014-15 year due to unseasonably warm weather, though it maintained earnings guidance for the group.

In a statement issued to coincide with its annual shareholders' meeting on Friday the firm said total sales at Primark, which trades as Penneys in Ireland, were more than 10 per cent ahead of last year, driven by new store openings.

Sales at stores open over a year were below its expectations, however, although the firm said Primark’s full-year profit estimate remained unchanged as it had budgeted for a higher level of mark-downs this year.

Shares in AB Foods were down 3.2 per cent at 3,099 pence at 1138 GMT.

All of the group’s other guidance was unchanged from its November 4 statement.

The firm expects “further progress” from its grocery, ingredients and agriculture divisions, but with the continuing fall in EU sugar prices and volatility in the world sugar price, anticipates a further large reduction in profit from AB Sugar.

It said it continued to expect a marginal decline in adjusted operating profit for the group, with the impact on earnings mitigated by much lower tax and interest charges.

The company added that the opportunity to grow adjusted earnings per share in the 2014-15 year was limited but that it expected progress in the following years.

Reuters