Penneys owner raises profit outlook after rise in sales

Associated British Foods on Monday raised its profit outlook for the 2022/23 year as it reported a 13 per cent rise in sales at its Penneys fashion business in its latest quarter, boosted by demand for its new summer ranges.

Consumers across Europe have defied expectations for a slowdown. Primark’s competitors, Zara-owner Inditex and H&M, also recently reported higher sales on the back of warmer weather despite a squeeze on incomes due to high inflation levels.

AB Foods, which also owns major sugar, grocery, agriculture and ingredients businesses, said it now expects its adjusted operating profit, its key profit measure, to be “moderately ahead” of the £1.435 billion (€1.6 billion) made in 2021/22. It was previously forecasting an outcome broadly in line.

AB Foods said Penneys’ 13 per cent jump in sales to £1.998 billion in the 12 weeks to May 27th came after shoppers bought more seasonal clothing and health and beauty products, and from higher average selling prices.

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It had forecast in April that like-for-like sales growth would moderate in its second half from the 10 per cent in the first half, saying it was cautious about the resilience of consumer spending in the face of an ongoing cost-of-living crisis. – Reuters