AB Foods Lifts Guidance on Robust Sales Growth; Sees Primark Margins Improving in Fiscal Year 2024 -- Update
September 12 2023 - 4:02AM
Dow Jones News
By Michael Susin
Associated British Foods raised its fiscal 2023 guidance for the
second time on the back of robust sales growth across its
categories and said it expects clothing retailer Primark's margins
to improve in fiscal 2024.
The U.K. conglomerate said Tuesday that it expects adjusted
operating profit--the company's preferred metric, which strips out
exceptional and other one-off items--for the year ending Sept. 16
to be slightly better than previous expectations, which saw profit
moderately ahead of last year's 1.435 billion pounds ($1.79
billion).
The FTSE 100 listed company said Primark revenue is anticipated
to be GBP9.0 billion compared with GBP7.70 billion a year ago.
Like-for-like sales growth is expected to be 9%. Primark sales
growth has been driven by selective price increases, well-received
ranges and strongly performing new stores, it said.
Primark's adjusted operating profit margin in the second half is
expected to be slightly below 8%, and around 8% in the full fiscal
2023, with higher-than-expected stock loss from stores across the
estate, and a modest amount of German restructuring costs.
The clothes retailer's adjusted operating profit margin for
fiscal 2024 is expected to significantly improve on the back of
lower material costs, the weakening of the U.S. dollar against
sterling and the euro and lower freight costs, AB Foods said.
In the food segment, sugar's performance in the fourth quarter
was better than expected, and adjusted operating profit for the
full year is anticipated to be modestly above last year levels of
GBP162 million. For fiscal 2024, the segment is expected make a
substantial improvement in profitability, supported by an
improvement in the performance of sugar.
The group added that it continues to manage inflation and drive
sales despite the challenging macroeconomic backdrop.
Two other well-known European fashion retailers are also set to
report sales this week. Spain's Inditex, the owner of Zara, Massimo
Dutti and other fashion chains, reports first-half results on
Wednesday, while Sweden's H&M reports sales on Friday.
Write to Michael Susin at michael.susin@wsj.com
(END) Dow Jones Newswires
September 12, 2023 03:47 ET (07:47 GMT)
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