• ABF raises full year outlook after resilient first half
• ABF expect total sales to be more than 20% ahead of prior year
• Primark total sales expected to be £4.2bn, up 19% YoY

Associated British Foods reported a pre-close trading update on Monday, which saw the Primark owner raise its full year outlook after a resilient first half.

ABF announced for the half year that they expect total sales to be more than 20% ahead of last year at actual exchange rates. Additionally, operating profit is expected to be broadly in line with the same period last year.

Despite previously outlining significant cost pressures in its trading statement last month, the group has found consumer spending to be much more resilient at the start of the financial year.

Primark reportedly traded very well for the half year, with total sales expected to be £4.2bn, 19% ahead of the prior year.

As a result, the group has improved its full year expectations. Adjusted operating profit and adjusted earnings per share is now forecasted to be broadly n line with the previous financial year. Macro-economic headwinds are expected to weigh on consumers in the months ahead, but inflation has become less volatile and ABF have seen some commodity prices decline.

ABF remain cautious of the resilience of consumer discretionary spending, but its food businesses are expected to be modestly ahead of last year.

Elsewhere, a little over a month ago Deutsche Bank upgraded ABF to Buy from Hold. Analyst Adam Cochrane argued a recovery in earnings expectations, with the headwinds faced in 2022 beginning to reverse, especially in regards to energy prices, currency and Primark.