Lulu Retail reported a $1.86-billion revenue for the third quarter of 2024, reflecting a 6.1 per cent year-on-year growth, according to a company announcement on Thursday. This marks the retail behemoth's first financial update since its landmark initial public offering (IPO) and listing on the ADX on November 14.

The robust sales performance was fueled by substantial growth in core markets such as the UAE, Saudi Arabia, and Kuwait, with sales surging across major product categories. Notably, double-digit growth was observed in fresh food, while electrical goods saw mid to high single-digit improvements. Like-for-like (LFL) sales for Q3 2024 rose by 1.2 per cent to $1.7 billion, and for the nine-month period, LFL sales increased by 2.2 per cent to $5.3 billion.

Twelve new Lulu stores were launched within the first nine months of 2024, including three in Q3. By September 30, Lulu's total selling space had expanded to 1.3 million sqm across 241 stores. The company's EBITDA for Q3 2024 stood at $176.3 million, up 9.9 per cent year-on-year. This strong EBITDA performance was underpinned by a gross margin expansion of approximately 130 basis points in Q3 2024, driven by an enhanced product mix and increased sales in higher margin categories, including private label products, which now account for 29.3 per cent of total retail sales compared to 28.6 per cent in Q3 2023.

Lulu's net profit from continuing operations surged to $35.1 million for the Q3 period, a 126 per cent increase, bolstered by improved operating profit and better cost management. For the nine-month period, net profit climbed by 73.3 per cent to $151.5 million. The UAE experienced robust revenue growth of 7.5 per cent in Q3 2024, primarily driven by a healthy LFL growth of 4.7 per cent and the positive market conditions in the region. Three new stores were opened during the nine-month period.

Revenue in Saudi Arabia grew by 5.7 per cent to $369.3 million in Q3 2024, supported by an enhanced fresh food offering tailored to meet the increasing demand for fresh products in the kingdom. Five new stores were opened in Saudi Arabia during the nine-month period, including two hypermarkets, two express stores, and one mini market. Oman, Kuwait, and Bahrain also achieved strong revenue growth, while Qatar maintained stable revenue and its leading market share position.

Omnichannel remains a focal point for Lulu, with e-commerce sales reaching $237.4 million during the nine-month period, an 83.5 per cent year-on-year increase. E-commerce sales now represent 4.3 per cent of total retail sales. Capital expenditure (for continuing operations) amounted to $98.5 million during the nine-month period, constituting 1.7 per cent of total sales. This was primarily invested in the opening of 12 new stores, including five in Saudi Arabia and three in the UAE.

Net debt totaled $2.54 billion by September 30, representing a net debt/EBITDA ratio of 3.2x on an IFRS-16 basis. Excluding leases, the net debt/EBITDA ratio remained stable at 1.4x, positioning the company well for continued investment in growth. Lulu's Happiness Loyalty programme continues to gain momentum, with the scheme now operational across all GCC countries, boasting approximately five million members by the end of the 9M 2024 period.

Post-period, Lulu announced a strategic partnership with Abu Dhabi's Modon Holding to develop retail facilities, including hypermarkets, supermarkets, and other retail stores. Additionally, Lulu opened five more stores, bringing the total number of stores opened in 2024 to 17. "The vision and ambition of nations across the GCC are enabling businesses like Lulu to thrive and creating opportunities for growth," said Yusuffali MA, chairman of Lulu Retail.

"The flexibility of our three-store format and growing e-commerce presence allows us to grow in diverse communities and to form strong partnerships across the region, as seen with the 12 stores we opened in the first nine months of this year and our recent partnership with Modon Holding. We’re excited to continue our growth journey as a listed company, delivering on the targets we’ve communicated to investors and ensuring Lulu remains where the world comes to shop." Saifee Rupawala, CEO of Lulu Retail, added: “The third quarter and nine-month period were marked with ongoing revenue and profit growth across our business, driven by sales growth across our six GCC markets, strategic expansion in higher margin segments like private label and through investment in operational efficiencies and customer-focused engagement."

"We are encouraged by the growth we have seen in the business and are pleased to reiterate our guidance for the 2024 period, with the fourth quarter seasonally stronger, supported by promotional campaigns and higher footfall given the holiday period."

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