1Q19 Trading Update British conglomerate Associated British Foods (ABF) reported its first-quarter trading update covering the 16 weeks ended January 5, 2019. This report covers only Primark, ABF’s retail segment. The highlights were:

• Primark increased its revenues 4% year over year, at both constant currency and actual exchange rates. This was below the consensus estimate of 5.5% constant-currency growth recorded by StreetAccount. Sales growth was driven by an increase in the retail selling space partially offset by a modest decline in same-store sales.
• Operating margins improved due to lower purchasing costs (led by a weaker U.S. dollar) and better stock management, the company did not provide figures.
• U.K. sales grew 1% year over year, which ABF claimed was ahead of the overall U.K. apparel market. The company pointed to positive U.K. comparable sales in September and October, a weak November and a December that exceeded its expectations.
• Sales in the eurozone were up 5% at constant currency. Sales growth was driven by strong performances in France, Belgium, Italy and Spain. Germany remained weak.
• The U.S. performed well with sales “well ahead” of last year, led by strong trading in the company’s Brooklyn store. The company did not release U.S. numbers but noted there was “strong performance” in the market.

The company highlighted that retail selling space increased 300,000 square feet since the financial year end. As of January 5, 2019, the company operated 364 stores with retail selling space of 15.1 million square feet, compared to 14.2 million square feet a year ago. Primark opened four new stores in the period: in Seville and Almeria, Spain; in Toulouse, France; and, a city-centre store in Berlin. Outlook ABF did not provide numerical guidance for Primark and noted that:

• It expects to open 900,000 square feet of retail space in fiscal 2019.
• Its new store in Birmingham (in the U.K.), with 160,000 square feet, is expected to open in April, and its first store in Slovenia later in the financial year.
• The opening of a new store in the U.S. state of New Jersey will be delayed until the next financial year due to a delay in the opening of American Dream Meadowlands shopping mall, where it will be located.
• One store in Oviedo, Spain, will close this spring.

For the group, the outlook was unchanged, with adjusted operating profit and adjusted earnings per share for the current fiscal expected to be in line with last fiscal year.