Penneys-Primark owner Associated British Foods has today raised its financial guidance for full year 2022-23, saying consumer spending had proven to be more resilient than it expected.
The group said Primark had traded "well ahead" of expectations.
Sales in the first half to March 4 are now expected to be £4.2 billion, up 16% at constant currency, with adjusted operating profit margin now expected to be above 8%.
"Our proposition of great quality at affordable prices and attractive store experience is proving increasingly appealing to both existing and new customers," it said.
It noted that early reaction to its spring and summer ranges has been "very positive".
Last September, Primark said it had decided to limit further price increases in 2022-23 beyond those already planned, seeking to maintain its value credentials among consumers.
The group also owns major sugar, grocery, agriculture and ingredients businesses.
It said total first half sales were expected be more than 16% ahead of the previous year at constant currency, with adjusted operating profit broadly in line with the previous year.
It said its food businesses, including grocery brands Twinings tea, Jordans cereals and Ovaltine drinks, continued to seek to recover inflation through cost mitigation and price increases.
For full year 2022-23, AB Foods said it now expected adjusted operating profit broadly in line with 2021-22 compared with a previous forecast of lower than the 1.44 billion pounds made that year.
For the second half the recovery of significant inflation in input costs remains a management priority, the group said, but it noted inflation has become less volatile and recently some commodity costs have declined.
"Macro-economic headwinds for the consumer remain and may weigh on spending in the months ahead," it said.
"At Primark, we remain cautious about the resilience of consumer discretionary spending in the face of continuing inflation in the cost of living and higher interest rates."
Shares in AB Foods have increased 24% so far this year.
Primark operates as Penneys here.
People shopping for holidays - Primark
Britain may be heading for a recession but many of its citizens are heading for the sun and shopping accordingly, the finance chief of clothing retailer Primark's owner said today.
After a tough 2022, British consumers are facing a further squeeze on their finances this year as the government cuts back support on household energy bills and mortgage rates rise.
Earlier this month, the Bank of England forecast a recession starting in early 2023 and lasting into early 2024.
However, that is not deterring Britons from spending on holidays, with several airlines and holiday operators having recently reported robust forward bookings.
"In terms of January and February I think an interesting lead indicator here is the fact that hot weather or beachwear is well up," John Bason, finance director of Associated British Foods, told Reuters, also noting strong sales of luggage.
"People are planning or have planned their holidays for this year," he said.
"Last year we were talking about people really wanted the holiday that they had not had during lockdown, well it seems to me they certainly want another one this year."
Bason was speaking after AB Foods raised its full year outlook and said Primark's first half to March 4 sales were expected to be up 16% on a constant currency basis.
He also highlighted strong sales of formal wear as Britons increased the frequency of their trips to the office and a big increase in sales of beauty products.
