Primark sweetens outlook for AB Foods as sugar disappoints
Associated British Foods has reported that it expects operating profits for the first half of the year to be in line with that of the previous year.
The company expects low profits from sugar to be offset by a stella performance from Primark.
Primark enjoyed strong sales in the first half and they are expected to be 13 per cent above the same period last year. This has been driven by four per cent like-for-like sales growth and an increase in retail selling space.
The company said like-for-like sales in the first eight weeks of the financial year were held back by warm weather.
Operating profit margin is now expected to be higher than in the same period last year, benefiting from warehouse and distribution efficiencies and lower freight rates.
The company has opened 16 new stores, including its first two in France. Primark expects to add three stores in France, two in Germany and an additional three in the UK later this year.
AB Food's sugar business has been hit by a fall in EU sugar prices as well as the world sugar price impacting industry revenues.