Primark expects its profit margin to fall next year after a strengthening US dollar raised its purchasing costs.
The fashion chain also cited inflation in raw material and energy costs and higher staff costs as factors likely to affect its business in the coming financial year.
With high inflation set to squeeze consumers’ disposable income, Primark’s parent company Associated British Foods (ABF) said in a trading update that it had ruled out further price increases “beyond those already actioned and planned”.
Primark’s profit margin for its next financial year, which begins later this month, is forecast to be lower than the operating profit margin of 8.0% expected for the second half of the current financial year.
ABF maintained its outlook for 2021/22, with its food business — which includes Twinings, Allied Bakeries and Blue Dragon — recording stronger revenue due to price rises as well as higher demand.
Adjusted operating profit for the group is anticipated to be significantly ahead of the last financial year.
