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AB Foods Sees Improved Performance Ahead as Primark Sales Strengthen — 2nd Update

By Sabela Ojea

 

Associated British Foods PLC said Friday that fashion retailer Primark's performance since the fiscal 2021 year ended on Sept. 18 has been ahead of expectations thanks to stronger like-for-like sales when compared with the latest quarter.

The British conglomerate said its performance across grocery, sugar, ingredients and agriculture has also been in line with views, which will help it achieve its current views of closing the first half and fiscal 2022 as a whole with adjusted operating profit and adjusted earnings per share growth.

The FTSE 100 company said Primark's margin has beat expectations on a year-to-date basis. However, it said it could need to raise prices due to supply-chain issues and higher energy costs.

"We have seen an escalation in the cost of energy, logistics and commodities and we have been implementing plans to offset these through operational cost savings and, where necessary, the implementation of price increases," the company said.

Primark, which is suffering from the latest Covid-19 restrictions in Germany, Austria and the Netherlands, has opened two stores since its fiscal 2021 year ended, AB Foods said.

"Looking ahead we currently expect Primark sales to be significantly better than sales in the comparable period in the last financial year, from December 2020 to April 2021, when the estate was largely closed," AB Foods added.

On Nov. 9 AB Foods said it expects Primark's performance to continue to improve, with sales recovering at least the 2 billion pounds ($2.64 billion) lost due to store closures in the last fiscal year, which it noted should lead to Primark's adjusted operating margin rising above 10%.

 

Write to Sabela Ojea at sabela.ojea@wsj.com; @sabelaojeaguix

 

(END) Dow Jones Newswires

December 10, 2021 03:37 ET (08:37 GMT)

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