// Primark parent Associated British Foods said the fashion retailer’s full-year UK sales would approach pre-covid levels
// Primark total sales were predicted to be roughly £7.7bn, roughly 40% higher year-on-year at constant currency
Primark owner Associated British Foods has warned of lower profit next year thanks to dampened consumer confidence amid Britain’s soaring inflation and cost-of-living crisis.
ABF said soaring energy bills and its decision to limit further price hikes would hurt the value retailer and its margins next year, despite UK like-for-like sales improving in the fourth quarter, achieving close to pre-covid levels.
The retailer said it would not introduce further price rises next year “beyond those already actions and planned” to support its affordable position in the market, despite previously saying it would make “selective” rises in its current seasonal range.
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ABF acknowledged “declining disposable income” for shoppers due to historically high levels of inflation.
The company said that it expects total sales to be some £7.7bn, 40% ahead of reported sales last year at constant currency.
ABF stated full-year group revenues will be “well ahead” of last year and said it was also on track to deliver a “significant increase’ in adjusted operating profits and adjusted earnings per share.
The business said it is expecting full-year operating profit margin of 9.6% with a second-half operating profit margin of 8%, as it launches its regional UK click-and-collect trial in the Christmas run-up.
ABF has said the group’s outlook for the financial year remained unchanged despite the “significant increase in adjusted operating profit and adjusted earnings per share.”
ABF’s full preliminary results are expected to release on 8 November.
