Associated British Foods has raised its profit outlook for the 2022/23 year as it reported a 13% rise in sales at its Primark 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 from high inflation levels.
AB Foods, which also owns major sugar, grocery, agriculture and ingredients businesses, said it now expected adjusted operating profit, its key profit measure, to be "moderately ahead" of the £1.435 billion (€1.67 billion) made in 2021/22.
It was previously forecasting an outcome broadly in line.
AB Foods said Primark's 13% jump in sales to £1.998 billion (€2.33 billion) in the 12 weeks to 27 May came after shoppers bought more seasonal clothing and health and beauty products, and from higher average selling prices.
It had forecast in April that like-for-like sales growth would moderate in its second half from the 10% achieved in the first half, saying it was cautious about the resilience of consumer spending in the face of an ongoing cost of living crisis.
Grocery and Ingredients
Trading in its Food businesses has 'continued to be good, it noted, with 'strong' constant currency sales in Grocery and Ingredients, boosted by pricing actions.
At the start of June, the firm announced plans to buy dairy technology company National Milk Records for £48 million (€55.7 million) to boost its agri-food unit.