Business

Penneys owner AB Foods raises profit outlook as sales of food and clothes rise

Growth has been driven by selective price increases, well-received ranges, and strongly performing new stores

The Penneys outlet on Mary Street was Primark's first to open in Dublin. Photograph: The Irish Times

Tue Sep 12 2023 - 08:40

Associated British Foods raised its full-year profit outlook on Tuesday for the second time in four months, driven by strong trading from both its Primark clothing business and its food operations in its latest quarter.

AB Foods, which also owns the Penneys brand in Ireland, said it now expected adjusted operating profit, its key profit measure, for the year to September 16th to be “slightly better” than its previous expectation of “moderately ahead” of 2021/22′s £1.4 billion (€1.6 billion).

Britain’s consumers have shown resilience in 2023 despite high inflation and rising borrowing costs. However, industry data has shown spending lost pace in August.

AB Foods, whose shares have risen 27 per cent so far this year, said Primark’s sales for the 2022/23 year were expected to be around £9 billion – 15 per cent ahead of 2021/22, with like-for-like sales up 9 per cent.

READ MORE

Primark’s growth has been driven by selective price increases, well-received ranges and strongly performing new stores.

Looking ahead to its 2023/24 year, the group forecast Primark’s operating profit margin would “recover strongly” from the around 8 per cent expected in 2022/23.

It also forecast a “substantial improvement” in profitability at its sugar business. – Reuters

LATEST STORIES