Primark owner ABF will reveal consumer demand amid cost crisis
Rimark-owner Associated British Foods will provide an update on how consumer demand fared over the summer and how costs have fluctuated across its multiple retail and food businesses.
The conglomerate’s share price is up 30% over the past year as the company has painted a positive picture since a trading warning was issued almost exactly a year ago.
On Tuesday September 12, the group will update shareholders on its performance over the past year.
Investors are confident that the update, which will cover most of the fiscal year ended September 16, follows the group’s recent announcement.
In June, ABF raised its full-year trading forecast after higher prices contributed to strong sales in the third quarter.
The company, which also has major sugar, ingredient and other grocery stores, said its sales rose 16% to £4.7 billion in the three months to the end of May.
The retail giant also said that this should bring its adjusted operating profit for the year slightly up year-on-year.
Last year ABF reported a profit of £1.4 billion.
Bosses said that one could expect a value that is “moderately higher”. Analysts expect the company to report a profit of £1.47 billion, with that profit set to rise further over the next year.
ABF is unlikely to report firm earnings so close to the end of its fiscal year, but investors are hoping the company will provide some clues as to whether the company is likely to meet its targets or perhaps even see further improvement.
The continued focus on the cost of living over the past few months could provide a renewed boost to Primark given its value position, which has fueled growth lately.
Analysts at Credit Suisse expect the fashion brand’s summer sales to have been “volatile.”
Russ Mold, investment director at AJ Bell, said: “As usual, Primark is likely to attract the most attention.
“The retail business performed better than expected for the first half, driven by higher footfall, higher volumes and higher prices, while store openings provided the underlying momentum.”
Shareholders will want the same thing for the second half of the year. The company’s grocery store, which owns the Twinings and Ryvita brands, is also under scrutiny for consumer spending.
According to industry data, spending on food and beverages has remained robust over the past year and price increases have contributed to sales growth since last year.
However, these are due to increases in costs, such as labor and energy costs, so investors will be particularly interested in seeing these costs stabilize to further increase profitability.
https://www.standard.co.uk/business/business-news/primark-owner-abf-set-to-reveal-consumer-demand-amid-cost-crunch-b1105865.html Primark owner ABF will reveal consumer demand amid cost crisis
