Associated British Foods (ABF) Reports ‘Very Strong’ Christmas Period

Associated British Foods (LON: ABF) revenue increased by 20% in the 16 weeks to January 7, the company revealed on Monday. 

The company, which owns clothing retailer Primark, revealed revenue for the period came in at £6.7 billion.

AB Foods said trading at Primark has been good in all its markets and was ahead of expectations, with a very strong Christmas period.

Footfall was strong in both the UK and the Eurozone, the company said, with unit volumes increasing and sales 18% ahead of last year. However, last year footfall was impacted by Covid-19-related headwinds.

Primark's like-for-like sales were 11% ahead, sustained by higher unit volumes, higher average selling prices, and a normalised markdown level. Furthermore, sales at Primark in the week leading up to Christmas Day reached a new record.

Analysts had predicted a potential benefit for low-cost clothing retailer Primark heading into the Christmas period, with inflation impacting shopping habits.

The company said in its release that “early trading in this new calendar year has been encouraging, but macro-economic headwinds remain and may weigh on consumer spending in the months ahead.”

They add that the company continues to face significant cost pressures, but inflation has become less volatile, with some commodity costs declining recently. Even so, consumer spending has “proven to be more resilient in this trading period” than AB Foods anticipated at the start of the financial year.

The group maintained its full-year expectations of significant growth in sales and adjusted operating profit, with adjusted earnings per share expected to be lower than the previous financial year.

AB Foods' shares dipped slightly on Tuesday, down 0.88% at the time of writing.