AB Foods plans Primark home delivery; Sees lower FY sales, shares slump

(Sharecast News) - Shares in Associated British Foods slumped on Thursday after the conglomerate said it expected full-year like-for-like sales at its soon-to-be-demerged Primark division to fall by 2.6% amid a tough consumer environment, adding that it also planned to introduce home delivery in the UK at the clothing retailer.

Primark's total sales growth was expected to come in at 2% for both the fourth quarter and full year thanks to new stores and franchises.

The company, which also owns food and ingredients operations, maintained full-year guidance. AB Foods shares were down as much as 11% in London trade.

The retailer added that fourthquarter trading would mirror the full year, with space expansion offsetting weaker underlying demand across several key markets.

AB Foods confirmed Primark would introduce home delivery in the UK after a review saying online market developments now supported profitable growth in the channel, marking a significant shift in the chain's digital strategy and building on its click & collect rollout.

To support the move, Primark has acquired a highly automated fulfilment facility in Sheffield to underpin future homedelivery operations.

The group said womenswear continued to perform well, supported by improved ranges and sharper pricing, although continental Europe remained challenging.

AB Foods maintained fullyear guidance, citing steady progress across its food, ingredients and agriculture businesses despite the tougher consumer backdrop.

Reporting by Frank Prenesti for Sharecast.com