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Associated British Foods reports higher year-over-year profit


Value fashion retailer and Primark-owner Associated British Foods has reported higher profit than a year ago and like-for-like sales in Q3 beating the comparable period two years ago, although Q4 reversed some of that gain due to new restrictions.

Total sales of the company in the second half of the 53 week-year to September 18 are expected to reach £3.4 billion and Q3 like-for-like performance is expected to increase by 3 per cent two-year-on-year.

Primark took a bigger hit to sales than many of its peers at the height of the pandemic as the firm doesn’t trade online. However, when stores reopened, it was also one of the most popular destinations for physical shoppers.

The brand’s sales improved as the period progressed and Q4 like-for-like sales are expected to be only’ 17 per cent lower than the same period two years ago.

The company quarter saw a continuation of the trend for 'comfort living' with “strong sales of leisurewear such as leggings and cycle shorts, and continued demand for seam-free matching separates for women during the quarter. It also saw a “good response” to the launch of new licensed product, such as the womenswear Disney paisley range. Sales of AW21 ranges “have started well” and its back-to-school ranges been strong.

Primark said its operating profit margin in H2, prior to the repayment of job retention scheme money, benefited from a "significant reduction” in store labour costs and lower store operating costs and is expected to be over 10%. Its forecast for full-year adjusted operating profit is now ahead of the profit delivered last year.

Looking ahead to its next financial year, the operating profit margin “will continue to benefit from lower store labor and operating costs”.