Associated British Foods nudged up its full-year earnings forecast this morning thanks to a strong performance at its Primark discount fashion chain, which trades as Pennys in the Republic.
The London-based group, 55 per cent-owned by the family of chief executive George Weston, said it now expected "some progress" in adjusted earnings for the year ending September 12th, compared with its previous forecast for a flat outcome.
Sales at Primark stores open at least a year were set to rise 7 per cent, it said in a statement, up from the 5 per cent reported in the first half of its financial year.
However, it also said gross profit margins at the 191-store-chain would be lower because of a rise in import costs following a fall in the value of sterling against the dollar.
Primark accounts for nearly a third of group profit and has branched out from Britain to open stores in Ireland, Spain, Portugal, Germany and the Netherlands.
Swedish rival Hennes & Mauritz reported a 3 per cent drop in underlying sales in July on the same month last year, following a 5 per cent decline in June. Europe's biggest fashion retailer Inditex posts first-half results on September 16th.
AB Foods said there would be a big rise in profits at its sugar and agriculture business as growth in Europe and South Africa more than offset losses in China.
The group, which markets Silver Spoon sugar, Twining tea and Ovaltine drinks, also said revenues and operating profit at its groceries division rose in the second half of its fiscal year.
Analysts currently expect AB Foods to make adjusted earnings per share of 55.3 pence, up from 54.9 pence the year before, according to the average of 19 polled by Reuters Estimates.
AB Foods shares have outperformed the DJ Stoxx European food stocks index by 11 per cent this year, and the retail stocks index by 3 per cent.
Reuters