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AB Foods says Primark sales dented by poor May weather

LONDON (Reuters) – Sales at fashion retailer Primark were dented by poor weather in May, its owner Associated British Foods <ABF.L> said on Thursday.

The group, which also owns a major sugar business, food brands such as Ovaltine, Ryvita and Twinings, and agriculture and ingredients businesses, did, however, maintain its overall guidance for its full 2018-19 year.

AB Foods said Primark’s sales in the 40 weeks to June 22 were 4% ahead of last year on a constant currency basis, driven by increased selling space partially offset by a decline in like-for-like sales. Primark accounts for about half of group revenue and profit.

It said in the UK Primark’s total sales continued to grow in the third quarter and it recorded a further significant increase in market share. However, UK underlying sales were held back by unseasonable weather in May which compared to much warmer temperatures in the same period last year.

Sales at Primark stores in the Eurozone were similarly affected by the unhelpful May weather.

Official UK data published last month showed cold weather in May prompted the biggest drop in British retail sales this year as shoppers delayed buying summer clothes.

AB Foods said Primark’s trading in June had improved in the UK and “recovered strongly” in the Eurozone.

It said sales growth was delivered in Spain, Portugal, France and Italy. But trading continued to be weak in Germany.

In the U.S. Primark continued to deliver encouraging like-for-like and strong total sales growth, the group said.

Over the 40 week period group revenue rose 3% on a constant currency basis.

AB Foods’ overall full-year outlook was unchanged, with adjusted earnings per share expected to be in line with 2017-18’s 134.9 pence.

(Reporting by James Davey; editing by Costas Pitas and Kate Holton)

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