9M19 Results ABF reported its year-to-date (9M19) trading update for the 40 weeks ended June 22. This report focuses on Primark, ABF’s retail business. Sales: Primark grew its year-to-date sales 4% at constant currency (also up 4% as reported). Sales growth was driven by increased retail selling space, partially offset by a decline in comparable sales. ABF noted that Primark continued its strong performance in the UK with a strong gain in market share. The company noted that UK same-store sales were negatively impacted by unseasonable weather in May, compared to a favourable environment in the corresponding period last year. Primark UK saw improved sales in June. Primark said that trading at its new UK stores was strong, led by positive customer reaction to the product range and the new food and beverage and beauty services offered in its Birmingham High Street store. The eurozone was also affected by unseasonable weather in May but trading recovered strongly in June. Sales growth was driven by Spain, Portugal, France and Italy. Trading in Germany continued to be weak. The US continued to perform strongly with “encouraging” comps and strong total sales growth. Primark expects to open new stores at the American Dream mall, New Jersey, and the Sawgrass Mills mall, Florida, over the next 12 months. The company has also exchanged contracts on a store in State Street, Chicago. Operating Performance: Primark did not provide operating margin numbers for the third quarter or year-to-date. But the company revised its earlier outlook for the second half of 2019, saying that a stronger US dollar on purchases will reduce the margin in the second half. It now expects that the negative forex impact on margins will be strongly offset by better purchase management and lower markdowns. Selling Space: Since the beginning of the financial year, Primark has increased its retail selling space by a net 0.8 million square feet. As of June 22, 2019, the company operated 372 stores with 15.6 million square feet of retail selling space compared to 14.7 million square feet a year ago. Primark added 0.5 million square feet of space in the third quarter by opening nine new stores, in Brussels in Belgium; Bordeaux in France; Wuppertal in Germany; Utrecht in the Netherlands; Hastings, Bluewater, Milton Keynes and Belfast in the UK; and its first store in Slovenia, Ljubljana. Primark also relocated its Birmingham, UK, store to new premises, and this is Primark’s largest store at 160,000 square feet. Primark noted that the contribution from the new stores was strong with performance at Birmingham, Bordeaux and Ljubljana beating the company’s expectations. The company closed the smaller of its two stores in Oviedo, Spain.  Outlook For FY19, Primark expects modest growth in net profit, and expects better buying and lower markdowns to help offset the negative forex impact on the operating margin; Primark expects the operating margin to expand. In 4Q19, Primark will open a store in Bonn, Germany, which will result in the gross increase in selling space for FY19 to total 0.95 million square feet.