--- adds more detail, analyst comment, share price ---
Cash-strapped shoppers in Ireland and southern Europe snapped up bargains at Primark, helping its owner Associated British Foods (LON:ABF) to stay on track.
ABF said the clothing discounter's stores in Spain, Portugal and Ireland performed strongly and the UK continued positive like-for-like sales.
Sales at shops in France, although excluded from the like-for-like measure, also stayed buoyant.
The group said it planned to open its first shop in Italy next year, representing its expansion into its tenth European market.
Sales at Primark in the 40 weeks of the year to date were 13% ahead of last year at constant currency, driven by an 8% increase in selling space and by very high sales densities in stores opened in the last year.
As a result of the weakening of the euro against sterling, total Primark sales were 9% ahead of the same period last year at actual exchange rates.
ABF said group revenue for the 40 weeks ended 20 June 2015 was 2% ahead of the same period last year at constant currency, and was level at actual exchange rates.
Movements in currency exchange rates in the current financial year mainly affected translation of overseas results into sterling, the full-year impact of which was still set to be about £25mln if current rates persist.
ABF said its earnings expectations for this financial year were unchanged, however, suggesting a modest decline in adjusted full year group earnings per share.
ABF said its grocery business was on track. Twinings Ovaltine made further profit progress since the half-year. Allied Bakeries was successfully increasing its volumes and was rebuilding Kingsmill’s presence in Tesco (LON:TSCO), although its margins remain under pressure.
ABF said in a trading update: "As previously indicated, the impact of currency on results for the next financial year will be more significant than this year and arises from transactional currency exposures, primarily in British Sugar and Primark."
Broker Charles Stanley said: "With full-year 2016 expected to be adversely impacted by the effect of currency, both in Primark and Sugar, and a high valuation multiple, we stay with our 'reduce' recommendation, while noting the potential longer term opportunity offered by a successful expansion of Primark into the US."