Lulu Group’s Q3 profit more than doubles in first results since IPO

Revenue in the three-month period rose more than 6 per cent annually to $1.86 billion

Sales grew in key markets such as the UAE, Saudi Arabia and Kuwait, Lulu says. Bloomberg

UAE-based retailer Lulu Group reported a 126 per cent increase in third-quarter profit, as it released its first earnings report since going public on the Abu Dhabi Securities Exchange last week.

Profit from continuing operations for the three months that ended on September 30 rose to $35.12 million from $15.54 million in the same period a year earlier, the company said in a filing to the ADX on Thursday.

Revenue in the third quarter rose more than 6 per cent annually to $1.86 billion, driven by “strong” sales performance in key markets such as the UAE, Saudi Arabia and Kuwait. Like-for-like sales in the third quarter increased by 1.2 per cent to $1.7 billion, Lulu said.

The company added that it recorded sales growth across key product categories, including double-digit growth in fresh food and mid to high single-digit improvement in electrical goods.

“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,” said Saifee Rupawala, chief executive of Lulu Retail.

This month, Lulu raised Dh6.32 billion ($1.72 billion) from its initial public offering, becoming the largest listing in the UAE this year. The hypermarket chain operator priced its shares at the top of the indicated range, driven by strong investor interest in regional listings.

Lulu's shares were up 0.49 per cent at Dh2.04 – its IPO price – on the ADX at 10.39am.

In the UAE, where the company has its largest store network, revenue grew by 7.5 per cent in the latest reported quarter, driven by same store sales growth of 4.7 per cent and “strong market tailwinds”.

Revenue in Saudi Arabia expanded by 5.7 per cent in the third quarter, boosted by an improvement in Lulu’s fresh food offer in the kingdom.

“Oman, Kuwait and Bahrain all achieved robust revenue growth, with Qatar delivering stable revenue and maintaining its leading market share position,” the company said.

Profit from continuing operations in the first nine months of this year rose by more than 73 per cent annually to $151.54 million, while revenue during the period grew by nearly 6 per cent to $5.72 billion.

Lulu invested $98.5 million in capital expenditure during the first nine months of 2024, mainly to open 12 new stores in Saudi Arabia and the UAE. This represented 1.7 per cent of the company's total sales, compared with 1.9 per cent in the same period last year.

The retailer, which has been prioritising its omnichannel strategy, said e-commerce sales increased by 83.5 per cent to $237.4 million in the first nine months of the year. E-commerce now accounts for 4.3 per cent of total retail sales.

Last month, a Lulu executive said that the company expects annual revenue of between 8 to 10 per cent annual growth this year, as it continues to grow its business.

“The UAE is our main market and KSA [Kingdom of Saudi Arabia] is our growth market. We are growing across the two markets,” its chief financial officer Prasad KK told The National.

LuLu, one of the largest supermarket chains in the Gulf, founded by Indian-born businessman MA Yusuff Ali in 1974, operates more than 241 hypermarkets and shopping malls in 10 countries including India, Egypt, Malaysia and Indonesia.

The company's three store formats and expanding online presence allow it to build strong regional partnerships, Mr Ali said.