Friday, September 22

Primark Sales Gather Pace But Still Lag Pre-Pandemic Levels

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(Bloomberg) — Associated British Foods Plc said sales at budget-clothing retailer Primark picked up during the first half but are still below pre-pandemic levels as omicron deterred some shoppers from leaving their homes.

AB Foods, which also owns grocery, agriculture and sugar businesses, said Primark’s sales are expected to rise more than 60% in the six months through March 5. Still, they’re seen 11% lower than pre-Covid levels two years ago, on a like-for-like basis. The company repeated it expects significant growth in profit this year at a group level.

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Key Insights

Primark has been hurt more than some rivals by European lockdowns and restrictions around Covid because the chain lacks an online business to fall back on. Last month Primark said it plans to cut 400 jobs to reduce costs. AB Foods said its broader businesses have faced supply -chain disruption and the company has raised prices in some of its divisions, such as grocery, to offset higher energy and commodities costs. The company said it expects lower first-half margins at its ingredients, agriculture and grocery units. AB Foods sold its debut public bond earlier this month, locking in 12-year funding before rates are expected to rise further.

Market Reaction

ABF stock has fallen 18% over the past year.

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