Primark owner says profits to be higher than expected

Primark owner says profits to be higher than expected

The owner of Primark said that its full-year profits would be higher than previously expected, thanks to strong sales of Barbie T-shirts, cargo shorts and boho dresses, as well as price increases.

Associated British Foods, the budget clothing chain, said cargo shorts, linen blend T-shirts and sliders, and boho and paisley dresses and its Moroccan-inspired matching outfits for all the family had all sold well over the summer.

The black Barbie T-shirt was the most searched item on the Primark site in the summer, as the Barbie movie became a smashing success at the box office. Also, moisturisers and makeup are selling well.

It has been a good summer, the products have continued to hold up really well, said ABF chief financial officer Eoin Tonge. Tourists and day trippers are coming back to London and other big cities like Manchester, Liverpool and Birmingham, and numbers are close to pre-pandemic levels, which meant Primeark's flagship stores were busier.

In the UK this summer, like-for-like sales at Primark rose by 7% in the past three months despite heavy rain, especially in July and the first half of August, while its stores in southern Europe suffered during record-breaking temperatures.

Primark has announced 7% price hikes for this summer and there are some slightly higher increases still to come in the autumn and winter, Tonge said.

In comparison, he expects clothing prices to be slightly stable next year and said shoppers should not expect big decreases because retailers are trying to rebuilt their profit margins.

Primark's like-for-like sales rose 9% to a record £9bn in the year to September. Alongside strong food sales, the company slightlysurpassed its previous forecasts for adjusted operating profit of 1.4bn in the year-earlier period.

ABF also produces sugar and produces well-known food brands like Twinings tea, Ovaltine and Patak's curry products. The company's profit margins are increasing again as materials and freight costs have reduced and the dollar has weakened. 'Selective price increases' have also been introduced by Primark.

It also cut prices on some children's clothing, including long-sleeve T-shirts, Zip-up hoodies and leggings for the upcoming autumn and winter as well as some baby outfits.

The total sales forecast is 15% ahead of last year, with the UK contributing 11% growth and Europe 18%.