Clothing retailer Primark, which operates as Penneys in the Republic, said it expects to report an increase in first half sales as price-conscious consumers boosted revenues.
Primark owner Associated British Foods (ABF) said for the six months to February 28th it expects like-for-like sales - which removes the impact of new stores – to be 5 per cent higher than the comparable period in 2008, after a strong Christmas trading period.
Penneys has 37 outlets in the Republic but ABF does not split-out its performance from that of Primark. John Bason, ABF finance director said "What we are seeing is an acceleration of a trend on the high street, away from the middle market and towards value clothing."
"Trading at Primark has been strong and over Christmas was ahead of our expectations. Sales in the first half were substantially ahead of last year, reflecting the increase in retail selling space and a 5 per cent increase in like-for-like sales," ABF said in a trading statement.
Despite the strong performance from Primark, ABF said it was budgeting for flat net earnings for the year to September 12th, 2009 due to investments in its sugar business and Primark.
At the end of this month, the group will have 187 stores in Britain, Ireland, Spain and its first in the Netherlands. The group expects to open a further seven stores in the second half, including its first in Germany and Portugal.
Profit from sugar will be ahead of last year, while grocery profits will be lower due to the impact of consumer downtrading in a number of businesses which more than offset food performance from Twinings tea, Ovaltine drinks and Allied Bakeries, ABF said.
The London-based AB Foods, 55 per cent owned by the family of chief executive George Weston, will report its full results for the half-year to February 28th on April 21st.
Additional reporting Reuters
