An exterior view of a Lulu Supermarket in Al Karama, Dubai. — File photo

Lulu Retail reported a net profit from continuing operations of $35.1 million for Q3, marking a 126% increase, fueled by enhanced operating profit and better cost management. For the nine-month period, net profit from continuing operations surged by 73.3% to $151.5 million. Revenues for Q3 2024 hit $1.86 billion, a 6.1% year-on-year rise. The robust sales performance was propelled by substantial growth in key markets such as the UAE, Saudi Arabia, and Kuwait, with notable sales increases across major product categories, including double-digit growth in fresh food and mid to high single-digit improvements in electrical goods.

Like-for-like (LFL) sales in Q3 2024 grew by 1.2% to $1.7 billion, while LFL sales for the first nine months of 2024 increased by 2.2% to $5.3 billion. The UAE experienced a strong revenue growth of 7.5% in Q3 2024, primarily driven by a healthy LFL growth of 4.7% and the positive market conditions in the region. Three new stores were launched in the first nine months of 2024.

Revenue in Saudi Arabia expanded by 5.7% to $369.3 million in Q3 2024, boosted by an improved fresh food offering tailored to meet the rising demand for fresh products in the Kingdom. Five new stores were opened in Saudi Arabia during the first nine months of 2024, including two hypermarkets, two express stores, and one mini market.

Oman, Kuwait, and Bahrain all saw significant revenue growth, with Qatar maintaining 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% year-on-year increase. E-commerce sales now account for 4.3% of total retail sales.

Earnings before interest, taxes, depreciation, and amortisation (Ebitda) in Q3 2024 stood at $176.3 million, a 9.9% year-on-year increase, with an Ebitda margin of 9.5%, up by approximately 30 basis points. The strong Ebitda performance was driven by a gross margin expansion of about 130 basis points in Q3 2024, facilitated by an improved product mix and higher sales in higher margin categories, including private label products, which now represent 29.3% of total retail sales compared to 28.6% in Q3 2023.

Capital expenditure (for continuing operations) amounted to $98.5 million during the first nine months of 2024, constituting 1.7% of total sales. Net debt as of September 30, 2024, was $2.54 billion, with a net debt/Ebitda ratio of 3.2x on an IFRS-16 basis. Lulu Retail introduced 12 new stores in the first nine months of 2024, with three new stores launched in Q3 2024, adding a total of 8,033 square meters. Total selling space as of September 30, 2024, was 1.3 million square meters.

Lulu’s Happiness loyalty program continues to gain traction, with approximately 5.0 million members by the end of the first nine months of 2024. Post-period, Lulu announced a strategic partnership with Abu Dhabi’s Modon Holding to build retail facilities. Lulu Retail’s growth strategy focuses on enhancing its existing store network, expanding its store network, driving operational efficiencies, and delivering revenue growth through private label and loyalty program expansion.

Yusuffali MA, Chairman of Lulu Retail, commented: “It has been a significant period for our team, marked by our record listing on ADX and our first set of results as a listed company. The vision and ambition of nations across the GCC are enabling businesses like Lulu to thrive and create growth opportunities.”

Saifee Rupawala, CEO of Lulu Retail, added: “The third quarter and nine-month period saw ongoing revenue and profit growth across our business, driven by sales growth across our six GCC markets, strategic expansion in higher margin segments, and investment in operational efficiencies and customer-focused engagement.”

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