Associated British Foods Plc reported higher clothing sales as expansion of the low-cost Primark chain offset adverse currency shifts.
Primark’s sales rose 9 percent in the first 40 weeks of its year, AB Foods said in a statement on Thursday. Excluding currency shifts, sales rose 13 percent.
The strengthening of the dollar against the euro has proved a thorn in the company’s side this year, weighing on profit at its sugar and fashion businesses. AB Foods reiterated that exchange rates should reduce full-year earnings by about 25 million pounds ($39 million). It also confirmed earlier guidance that adjusted earnings per share will decline “modestly” in the current financial year.
London-based AB Foods has come to rely on Primark for growth as record global supplies have led to a slump in profitability at its sugar-production business. The retailer is expanding across Europe and into the U.S., with its first outlet there set to open in Boston in September.
The company said it expects a decline in the Illovo sugar business’s operating profit. Group sales were unchanged in the 40-week period.
Bloomberg News, edited by ESM