Associated British Foods, the U.K. conglomerate that owns clothing retailer Primark, has announced an increase in its fiscal 2023 guidance due to improved sales growth across its various categories.
Strong Performance and Expectations
The company now expects its adjusted operating profit for the year ending Sept. 16 to be slightly better than previous expectations, which projected profit to be moderately ahead of last year’s £1.435 billion. Primark revenue is anticipated to reach £9.0 billion, compared to £7.70 billion the previous year, with a projected 9% like-for-like sales growth. This growth has been fueled by selective price increases, popular product ranges, and successful new store openings.
Positive Outlook for Fiscal 2024
Looking ahead, Primark is expected to experience a substantial recovery in its adjusted operating profit margin for fiscal 2024. This is attributed to lower material costs, the weakening of the U.S. dollar and the euro against sterling, as well as decreased freight costs.
Food Segment Improvements
In the food segment, Associated British Foods expects the sugar category’s profitability to significantly improve in fiscal 2024, supported by the enhanced performance of British sugar.
Overcoming Challenges
Despite the challenging macroeconomic environment, the group remains committed to managing inflation and driving sales.
