ASBFY Associated British Foods Plc (PK)

By Michael Susin

Associated British Foods on Tuesday raised its fiscal 2023 guidance on the back of improved sales growth across its categories.

The U.K. conglomerate, which owns clothing retailer Primark, expects adjusted operating profit--the company's preferred metric, which strips out exceptional and other one-off items--for the year ending Sept. 16 to be slightly better than previous expectations, which saw profit moderately ahead of last year's 1.435 billion pounds ($1.79 billion).

The FTSE 100 listed company said Primark revenue is anticipated to be GBP9.0 billion, compared with GBP7.70 billion a year ago. Like-for-like sales growth is expected to be 9%. Primark sales growth has been driven by selective price increases, well received ranges and strongly performing new stores, it said.

Looking ahead, Primark is expected to see a substantial recovery in its adjusted operating profit margin for fiscal 2024 on the back of lower material costs, the weakening of the U.S. dollar against sterling and the euro and lower freight costs, it added.

In its food segment, it expects the sugar category to make a substantial improvement in profitability in fiscal 2024, supported by an improvement in the performance of British sugar.

The group added that it continues to manage inflation and drive sales despite the challenging macroeconomic backdrop.

Write to Michael Susin at michael.susin@wsj.com

(END) Dow Jones Newswires

September 12, 2023 02:45 ET (06:45 GMT)

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