Primark’s Parent Company Raises Outlook — Retail Bum

Primark’s parent company Associated British Foods has raised its outlook, with consumers showing more resilience than expected.

The company noted that Primark was performing much better than its expectations, with sales in the first half of the year expected to reach $5 billion, up 16%, and adjusted profit margins projected to come out above 8%.

“Our proposition of great quality at affordable prices and attractive store experience is proving increasingly appealing to both existing and new customers,” the company said, adding that early response to its spring and summer collections has been very positive.

Meanwhile, the company’s food business, which includes grocery brands such as Twinings tea and Jordans cereals, is continuing to recover with cost mitigation efforts and price increases, according to Reuters.

In September 2022, the company noted it was capping further price increases in 2022–23 as it sought to retain its value credentials amongst its customer base.

For the full-year 2022–23, the company now expects its adjusted operating profits to align with 2021–22, compared to its previous forecast of just $1.74 billion.

“Macro-economic headwinds for the consumer remain and may weigh on spending in the months ahead,” the company said.

“At Primark, we remain cautious about the resilience of consumer discretionary spending in the face of continuing inflation in the cost of living and higher interest rates.”

Originally published at https://retailbum.com on February 28, 2023.