Primark owner ABF warns on profits as strong dollar bites
Associated British Foods said Thursday that earnings in the next fiscal year would be lower than forecast as a strengthening dollar pushes the costs of the Primark retailer.
Primark sources most of its clothing from South Asia and its default currency is the dollar, which hit its 37-year high against the pound on Wednesday and also strengthened against the euro.
In a trade update, the group said it also faced much higher energy costs at its stores and had made a “commercial decision to limit further price action” in its next fiscal year, which begins October 1, as UK consumers were faced with tightness. on their income.
As a result, operating profit margins are now expected to be lower than in the second half of the group’s current financial year. There are no changes in the group’s profit expectations for the current year.
Shares in ABF fell 8 percent in early trading in London.