Associated British Foods has said that it anticipates a stronger full-year outlook for clothing retailer Primark, following a better than expected performance in the banner's recent quarter.
Primark posted revenue of £1.6 billion (€1.86 billion) in the quarter to June 19, following the reopening of all stores and the opening of seven new stores. This is up from £600 million (€699.24 million) in the same period last year.
'This quarter, sales in the reopened stores were ahead of expectation in all markets, a number of new sales records were set and the like-for-like performance was much improved on earlier periods during this pandemic, reflecting an increase in both confidence and willingness to spend by our customers,' the group said in a statement.
In February, the group had warned of a £1.1 billion hit to sales as a result of the prolonged lockdown period.
Like-For-Like Sales Rise At Primark
Primark’s like-for-like sales were 3% up on a two-year basis in the quarter, though volatility remained high and performance varied by region depending on the degree of COVID-19 restrictions still in place.
The group said data for the total UK clothing market, which includes online sales, for the seven-week period after reopening showed both volume and value share gains for Primark on a two-year basis.
AB Foods now has higher expectations for Primark's final quarter sales and its forecast for full-year sales has increased accordingly.
Primark's full-year 2020-21 adjusted operating profit, stated before repayment of government job retention scheme monies, is now expected to be broadly in line with 2019-20, versus previous guidance of "somewhat lower".
Grocery, Sugar Businesses
Associated British Foods said that its Grocery business, which includes Twinings Tea and other brands, were 3% lower than the same period last year, which saw a surge in sales at the start of the pandemic.
It did note that sales in its Grocery arm were 6% higher than at the same point two years ago, however.
Sugar revenues, meanwhile, were 'significantly ahead', by 21% at constant exchange rates. The company cited strong volumes in in Illovo and China and higher prices in Europe and Africa as the reason for the strong performance.
AB Agri, its agriculture arm, saw sales up 10% on last year, with revenues in its UK compound feed business and in China 'well ahead' of expectations. Ingredients were up 3%, driven by both AB Mauri and ABF Ingredients.
The group said that its full-year forecast for group adjusted operating profit is now in line with last year's outcome.