Penneys group weathers slump impact with 19pc rise in sales
Primark and Penneys owner Associated British Foods (ABF) said the recession was hitting sales at the discount clothier in Ireland, but overall first-quarter sales for the popular chain were 19pc higher than the same period last year.
ABF, which is controlled by the Weston family -- owners of Brown Thomas and Selfridges -- said overall trading was ahead of expectations, with group revenue up 17pc in the 16 weeks to January 2.
The strong performance sent shares in ABF as much as 2.5pc higher in London before they ended the session up 1.1pc at £8.69. They've risen more than 15pc in the past 12 months.
ABF, which owns a range of household brands such as Ryvita, Twinings, Ovaltine and Kingsmill, said that group trading had been ahead of expectations, with sterling weakness against the euro and the Australian dollar helping to boost the performance.
Sales at its sugar unit were 68pc ahead year-on-year, and ingredients sales rose 11pc.
The company has been steadily expanding its Primark footprint across Europe, having opened stores in the past year in Spain, the Netherlands, Germany, Belgium and Portugal. It now has 196 stores in the stable.
Commanded from a base in Dublin, Primark and Penneys was until last year headed by Arthur Ryan.
He stepped aside as chief executive of the unit after helping to found the business nearly 40 years earlier.
He remains as chairman of Primark, with the chief executive role being taken over by the chain's former chief operating officer, Paul Marchant.
ABF said that its gross margin in Primark and Penneys stores had been reduced as a result of the higher cost of goods sourced in US dollars.
Analysts were buoyed by ABF's results, as the company said it expected "good revenue growth and a significant increase in operating profit this year" as a result of returns from long-term investments and restructuring.