Industrial thread maker Coats has reaffirmed its full-year guidance on the back of higher sales in its first-quarter and "encouraging progress" on its two-year transformation programme.

Group sales for the period grew 5% year-on-year on a constant currency basis, driven by a strong performance in Coats' industrial division (up 6%). This was achieved by continued solid growth of the core apparel and footwear business, which saw sales increase 3% in the quarter to the end of April.

Reported sales growth for the group of 8% in the period was above the constant exchange rate growth of 5% due to the US dollar weakening against certain key trading currencies, for example the Chinese Yuan, Euro, Indian Rupee and Mexican Peso.

The company's performance materials sales grew 19% on a constant currency basis, reflecting continued strong growth in Asia and EMEA, an improvement in the US consumer durables markets, and the contribution of Gotex, the Spanish producer of high-tech industrial yarns and tapes that it acquired last June. Organic growth for the division was 4%, underpinned by continued double-digit growth in hi-tech end uses (for example, flame retardant yarns), with some weakness in certain traditional end use segments in North America.

Crafts sales, however, were down 4% in the quarter on a constant currency basis, largely due to the North American business, where market conditions remained tough, alongside the adverse impact in the period of the introduction of own-label hand knitting products at a major customer.

Meanwhile, Coats said it has made progress on its two-year transformation programme, Connecting for Growth, since its launch in February.

The strategy is designed to drive speed, agility, innovation and lower costs across the organisation, while enabling the next phase of growth at Coats and accelerating its transition from the industrial age to the digital age.

"Encouraging progress has been made since February, and the programme is on track," the firm said. "After reinvestments of about US$10m per annum, the programme is anticipated to deliver net annualised operating cost savings of $15m by 2020, as previously announced."

Looking ahead, Coats said the business continues to perform well, and anticipates delivering 2018 full year results in line with management's expectations.