Lulu Retail books higher profits for Q1-2025 as Ramadan demand helps

Dubai: Lulu Retail will be looking to impress investors after hitting a smart 15.8% growth in Q1-2025 net profit to $69.7 million. Also, its profit margin has improved during the period, by 25 basis points to 3.4%.

Revenues came to $2.1 billion, up 7.3%, and vastly helped by sales increases during Ramadan in March.

The revenue and profit gains were 'underpinned by a combination of like-for-like sales growth, supported by strong trading during the Ramadan period', said Saifee Rupawala, CEO of Lulu.

The hypermarket operator is on track with its new store additions, targeting 20 opening this year. In Q1-25, there were five new locations.

"We expect our growth momentum to continue as we remain focused on several initiatives - including driving growth in existing store network, opening new stores, driving operational efficiencies and delivering further upside through our private label and e-commerce offerings."

On ADX, the stock is at Dh1.4, having this year pushed its way from the lows the stock had hit. Analysts had been talking about the Lulu share price potentially poised for a decisive breakthrough. The Q1-25 results will come in handy.

UAE ecommerce and Saudi new stores

In the UAE, which is Lulu’s largest market, there was a mid-single digit revenue increase of 5.2%. There was a 'strong performance' in the fresh food segment, which grew 15.6%. "This was further supported by strong e-commerce sales in the UAE which saw robust growth, rising 40.1%, supported by an increase in sales through aggregators," said a statement.

In Saudi Arabia, revenues were higher by 10.3%, primarily from new store openings over the last 12 months and 'strong like-for-like growth'.

The gains in Saudi Arabia are of particular significance for Lulu. This is the market where the retailer has been ploughing sizable funds and recruiting. If the profit numbers from the Saudi operations rise in step, that too will be decisive.

Cut down on debt

Lulu also scored a big boost by reducing net debt to $2.3 billion. Excluding lease liabilities, the leverage improved from 1.3x to 0.9x over the same period.