Associated British Foods Raises Guidance After Post-Lockdown Trading Exceeds Expectations
Associated British Foods said that it expects full-year profit at its Primark fashion chain to be at least at the top end of its previously guided range after trading in its latest quarter exceeded expectations.
Adjusted earnings per share for the group as a whole for the year to Sept. 12 were forecast to be "significantly below" last year, however, mainly as a result of the decline in Primark's profit due to lockdowns across Europe.
In July the group forecast full year adjusted operating profit for Primark in a range of £300 million (€335 million) to £350 million (€390 million), down from £913 million the previous year.
'We expect adjusted earnings per share to be significantly below last year as a result of the decline in Primark’s profit due to the store closures and the ongoing impacts on customer demand caused by COVID-19,' the group said in a statement.
Following the lockdowns, all Primark stores reopened during May, June and July, and trading during the fourth quarter has been strong, the group said.
In the latest four-week UK market data for sales in all channels, Primark achieved its highest ever value and volume shares for this time of year, it added.
Primark, which does not have an online offer, expects UK sales since reopening to be 12% lower on a like-for-like basis, with Europe and the United States down 17% and 9% respectively on the same basis.
AB Foods also said trading in its food businesses had exceeded expectations in its fourth quarter.
It said the grocery division had benefited from a continuation of increased sales in its key markets of the United States, Europe and Australia.
Increased demand for yeast and bakery ingredients, particularly across the Americas and China, delivered higher sales for the ingredients division, it added.
For the full year the group forecast a "very strong" increase in aggregate profit for its sugar, grocery, agriculture and ingredients businesses.