Associated British Foods, the owner of budget fashion retailer Primark, updated the markets on stronger-than-expected first half sales on Monday, causing shares to spike in early trading.
First-half sales at Primark are expected to be 11 percent ahead of last year at constant currency, and 21 percent ahead at actual exchange rates. The company attributed the rise to increased retail selling space.
UK stores performed well in the first half, with sales at stores open over a year rising 2 percent alongside an increase in market share. Across the Primark group as a whole, like-for-like sales were flat.
AB Foods took the opportunity to reiterate that Primark’s operating profit margin in the first half will decline, with the strength of the US dollar having a negative effect on costs.
The group said it made “excellent progress” in the half year to March 4th, disclosing an adjusted operating profit of 1.12 billion pounds in the financial year 2015-16 alongside adjusted earnings per share of 106.2 pence.
Shares in Associated British Foods (LON:ABF) rose after the update, but have since dropped back down. They are currently trading down 0.71 percent at 2,595.50 (0949GMT).