Associated British Foods has today reported a near doubling in first-half profit but said its Primark clothing business would have to raise prices because of the severe inflationary pressures it was facing.
The group said today that inflationary pressures were such that it is unable to offset them all with cost savings, and so Primark will implement selective price increases across some of its autumn/winter stock.
“However, we are committed to ensuring our price leadership and everyday affordability, especially in this environment of greater economic uncertainty,” said CEO George Weston.
AB Foods, which also owns major sugar, grocery, ingredients and agricultural businesses, made adjusted operating profit of £706m for the 24 weeks to March 5, up from £369m the same time last year.
Group revenue for the six months rose 25% to £7.88 billion.
The better outcome reflected all Primark stores remaining open and trading throughout the period except for short spells in Austria and The Netherlands. Primark trades as Penneys here.
That compared to prolonged periods of store closure in Ireland, the UK and Europe in the first half of the previous year.
“Notwithstanding the inflationary pressures we are experiencing, our outlook for the year is for significant progress in adjusted operating profit and adjusted earnings per share for the group,” Weston added.