Growth of the Primark budget-clothing
Associated British Foods Plc (ABF) reported full-year profit that beat estimates as the growth of the Primark budget-clothing chain offset a steep decline at the company’s sugar unit.
Adjusted earnings per share rose 6 percent to 104.1 pence in the 12 months ended Sept. 13, the London-based company said in a statement today. That compares with the 102.9 pence average estimate of 18 analysts compiled by Bloomberg.
The company forecast a “marginal” decline in adjusted operating profit in this financial year, weighed down by its sugar business.
Primark’s like-for-like sales increased 4 percent for the year. Primark’s discount fashions have seen the chain become a favorite with U.K. shoppers wanting the latest designs at cheap prices. The retailer is expanding across Europe and into the U.S., with its first, 70,000 square-foot (6,503 square-meter) outlet scheduled to open in Boston, Massachusetts, next year.
“We’ve seen really good margin growth across the group,” Chief Executive Officer George Weston said in a phone interview. He attributed the improvement to “good work on cost containment” and increased sales in higher-margin parts of the business.
AB Foods shares rose 0.3 percent to 2,680 pence at 8:52 a.m. in London, taking the advance to 9.6 percent this year.