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The owner of Primark raised its profit forecast for the year, as sales at the discount chain were boosted by strong demand and higher prices for summer clothing.
Like-for-like sales at Primark rose 7% in the three months to May 27, Associated British Foods, which also has a grocery and ingredients division, said on Tuesday, showing that consumers were more confident despite high costs. , but still exhibits resilience. life crisis.
The retailer also sold more health and beauty products than expected, driving overall group sales up 16% year-on-year to £4.7bn.
ABF now expects adjusted operating profit to be slightly higher than last year’s £1.4bn.
The update comes after rival Next said last week that warmer weather and rising wages are encouraging shoppers to spend more on summer wardrobes, and raised profit guidance. Other fashion retailers, including Zara parent Inditex and H&M, also reported a strong start to summer.
Shoppers have been grappling with stubbornly high inflation in Britain, especially on food. Supermarkets will be scrutinized by MPs on Tuesday to ensure they are not profiteering from higher prices.
Richard Chamberlain, an analyst at RBC Capital Markets, said he expects “short-term sales trends to continue, given the continued recovery trend in brick-and-mortar retail and the sharp improvement in Primark’s (profit) margins.” will continue to develop healthily.”
The chain, one of Europe’s largest clothing retailers, has benefited from a strong return to brick-and-mortar stores following the Covid-19 pandemic as it refrains from selling online. This summer, the company will expand the “click and collect” pilot in more stores in the UK, focusing on children’s products.
Shares were down 0.8 percent in morning trade.