Associated British Foods, which warned on profit earlier this month, confirmed on Thursday that underlying sales at its Primark/Penneys clothing business fell 2.7 per cent in the Christmas quarter.
When AB Foods issued its profit warning on January 8th, it published sales estimates for the 16 weeks to January 3rd. Final figures were published on Thursday.
The warning, which sent AB Foods’ shares down 14 per cent, was due to weaker-than-expected Primark sales and subdued demand in the United States for its cooking oils and bakery ingredients.
It cast a shadow over the group’s plans to separate Primark (which operates under the Penneys brand in Ireland) from its food business, which includes grocery brands such as Ovaltine, Ryvita and Twinings, as well as major sugar, agriculture and ingredients units.
The group said in November it was conducting a review of its structure and hoped to decide by April 21st when first-half results are reported. However, CEO George Weston said the “working assumption” was a separation would happen.
Thursday’s update made some adjustments from the January 8th statement.
Total retail revenue was up 4.2 per cent over the 16 weeks versus a previous estimate of up 4 per cent, sugar revenue was down 4.3 per cent versus a previous estimate of down 2 per cent, ingredients revenue was down 2.9 per cent, versus a previous estimate of down 3 per cent, and agriculture revenue was down 4.1 per cent versus a previous estimate of down 4 per cent.
Grocery revenue was flat, confirming the previous estimate.
As of the end of last September, Penneys operated 38 stores in the Republic, with more than 1.1 million sq ft of retail space. Primark is headquarted in Dublin. - Reuters
