LONDON (Reuters) – Associated British Foods raised its full-year profit forecast on Tuesday for the second time in four months, thanks to strong performances at its Primark clothing business and food operations.

AB Foods said it now expects adjusted operating profit for the 2022/23 financial year through September 16, its key measure of profitability, to be “slightly better” than its previous expectation of “moderately higher ” to 1.435 billion pounds (1.672 billion euros) for the 2021/22 financial year.

UK household consumption has been resilient in 2023 despite high inflation and rising borrowing costs. Industry data showed that spending slowed in August, however.

AB Foods said sales at its budget clothing chain Primark for the 2022/23 year are expected to be around £9 billion, 15% more than in 2021/22, with sales at constant scope up 9%.

Primark’s growth has been driven by selective price increases, well-received ranges and high-performing new stores.

Looking ahead to the 2023/24 financial year, the group expects Primark’s operating profit margin to “recover strongly” from the approximately 8% expected in 2022/23.

Primark also expects a “substantial improvement” in the profitability of its sugar business.

(Reporting by James Davey, by Nathan Vifflin)

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