Associated British Foods said fourth quarter sales at its Primark fashion business were lower than expected, with shopper numbers hurt by public health measures in its major markets to control the spread of Covid-19 and the Delta variant in particular.

AB Foods said on Monday that Primark’s like-for-like sales in the third quarter were 3 percent ahead of the comparable period two years ago, reflecting very strong trading in the UK and those European regions where stores had reopened.

However, it forecast that for the fourth quarter to Sept. 18 Primark’s like-for-like sales would be down 17 percent on two years ago.

The group said Primark had seen a significant improvement in trading as the quarter progressed, from a weekly decline in like-for-like sales of 24 percent at the start of the period to a decline of 10 percent in recent weeks.

Despite the shortfall in Primark’s sales the group still raised its profit outlook for the full 2020-21 year, reflecting strong profit margins at the fashion business, due to a significant reduction in labour and store operating costs, and a robust performance from its food and sugar operations.

It forecast full-year adjusted operating profit stated before repayment of job retention monies, above last year’s £1 billion ($1.38 billion), excluding the benefit of a 53rd week this year. It had previously forecast it to be in line with the previous year’s outcome.

For the full year, the group now expects AB Sugar to deliver an even greater improvement in adjusted operating profit over last year than previously expected, while Primark’s adjusted operating profit, stated before repayment of job retention scheme monies, is expected to be ahead of last year.

By James Davey; editor: Michael Holden.

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