Associated British Foods has reported a 15% rise in sales at its Primark clothing business over the 16 weeks to January 7, benefiting from "very strong" trading in the Christmas period.
The group, which also owns major sugar, grocery, agriculture and ingredients businesses, said its total revenue rose 16% on a constant currency basis, adding its outlook for the full year was unchanged.
British official data showed inflation-pinched consumers cut their shopping by the most in the key month of December in at least 25 years, but some retailers performed better than expected, including those aimed at the value range of the market.
AB Foods said consumer spending had proven to be more resilient in the quarter than anticipated at the start of the financial year.
'To date, Primark trading has been good in all our markets and was ahead of expectation," the group said in a statement. 'Early trading in this new calendar year has been encouraging but macro-economic headwinds remain and may weigh on consumer spending in the months ahead.'
During the financial year, it plans to open a further 17 Primark stores – seven in the US, three in France, three in Spain, two in Italy, one in Romania, and its first store in Slovakia.
AB Foods, whose shares have fallen 8% over the last year but are up 18% over the last month, maintained its guidance for adjusted operating profit lower than the 2021-22 outcome of £1.44 billion (€1.64 billion).
It said overall expectations are unchanged with the group anticipating 'significant growth' in sales.
Commenting on its performance, analyst Clive Black of Shore Capital said, "We are pleased, as with a number of UK consumer stocks, that the share has commenced FY23 in a sound to encouraging manner (+18% YTD) with smoke signals to what may be a better than previously feared earnings outcomes."
News by Reuters, additional reporting by ESM. For more A-Brands news, click here. Click subscribe to sign up to ESM: European Supermarket Magazine.