Primark Expects Strong Performance for Fiscal 2024

Associated British Foods has reiterated its fiscal 2024 expectations for its retail subsidiary Primark, following increased sales leading up to Christmas. The conglomerate expects Primark's adjusted operating profit margin to be above 10%, depending on consumer demand.

Revenue for the 16-week period ending January 6th totaled £6.885 billion, compared to £6.70 billion in the same quarter last year. Primark sales rose by 7.9% at constant currency rates to £3.38 billion, driven by higher average selling prices. Like-for-like sales grew by 2.1%.

Despite a slow start due to warm weather, Primark experienced robust Christmas trading, resulting in a 4.5% increase in sales in the UK during the quarter, with like-for-like sales up 3.8%.

In terms of revenue by business segment, sugar saw the largest rise of 13% to £825 million, while agriculture sales dropped by 11% to £572 million.

The company expects further improvement in product gross margin to drive profit margins and protect against potential supply chain disruption in the Red Sea. Overall, Associated British Foods is anticipating a year of significant progress in profitability and cash generation.