Primark’s margin recovery narrative and sales performance for the second quarter ended 2 March will be in focus when parent Associated British Foods (ABF) delivers first half results (23 April).

Shareholders will also be seeking reassurance the food-to-fashion conglomerate still expects ‘meaningful progress’ in profit and cash in the year to September 2024.

The jewel in the ABF crown, Primark’s like-for-like sales were up 2.1% in the first quarter to 6 January, a slowdown from the 8% growth delivered in the previous quarter, although higher average selling prices and a strong line in Christmas-themed clothes helped the discount fashion chain avert a festive disaster.

Gross margins are on an improving trajectory at the cut-price clothing chain, whose UK market share reached a new record at 7.1% for the 12 weeks to 10 December 2023.

However, competition in fast fashion remains fierce and recent downpours won’t have helped store footfall, while investors will be hoping the retailer has successfully navigated Red Sea supply chain disruption.

The market will also be eager to learn if Primark’s US sales, which rocketed 45% higher in the first quarter, remain on a growth tear, and if Associated British Foods’ popular grocery brands, often overshadowed by retail arm Primark, continue to perform well.

Management has previously expressed confidence in a ‘marked’ improvement in British Sugar's profitability this year. Liberum Capital believes Associated British Foods could beat consensus expectations for full year 2024 ‘driven by stronger than expected profitability at both Primark and Sugar’.

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