Primark owner Associated British Foods (ABF) said its group operating profit will be hit this financial year as its sugar business continues to struggle and strong sterling negatively impacts its bottom line.
ABF said that the strength of sterling will probably knock around £15m (€19.5m) from its adjusted full-year operating profit, but it said the impact will be mitigated by "much lower" tax and interest charges.
ABF's sugar unit has been suffering due to a glut of supply in the global market.
ABF is going to take a £128m (€167m) writedown as it closes two sugar factories in China, it said in a trading update covering the 16 weeks to January 3.
Group like-for-like revenue at ABF in the latest period rose 3pc on a constant currency basis, but was just 1pc ahead on actual exchange rates. Annual revenue at ABF is around £13bn (€17bn).
At Primark, which trades as Penneys in Ireland, sales in the period were up 15pc on a constant currency basis and by 12pc at actual exchange rates.
ABF said the sales rise was the result of increased retail selling space and very high sales densities in stores opened in the last year, with "exceptional trading" from stores it has opened in France.
It added that like-for-like sales growth in the UK, Ireland and Iberia was positive, but that total like-for-like sales growth was restrained by the impact on existing stores of new store openings in the Netherlands and Germany.
It said plans for a US launch of the Primark chain later this year are progressing well.