Lulu’s 2024 profit strong but fourth quarter takes a hit

Lulu

Lulu Retail, the largest grocery retailer in the GCC, said 2024 net profit rose 12 percent to $249 million from $222 million in 2023, thanks to new store rollouts and improved margins.

Revenue increased 5 percent year on year to $8 billion, driven by strong performance in Oman, the UAE and Saudi Arabia, the company said.

The retailer floated 30 percent of its shares on the Abu Dhabi stock exchange in November last year, raising $1.72 billion, among the region’s largest initial public offerings. But the shares have since languished, closing at AED1.84 on 10 February.

At the time of the flotation, Lulu operated 116 hypermarkets, 102 express stores and 22 mini markets in the GCC, with the UAE, 56 in Saudi Arabia and 81 in Kuwait, Oman, Bahrain and Qatar. 

The supermarket chain said that it had seen growth across several categories, with fresh foods increasing by 10 percent compared to the prior year. Additionally, electrical goods reported growth, particularly in mobile phones, supported by year-end promotional campaigns.

• Strong demand for discount retail in Saudi Arabia and UAE
• Abu Dhabi grocery business Mair Group to list on ADX
• UAE’s LuLu to build India’s largest shopping mall for $483m

Ecommerce sales increased 70 percent year on year to $326 million in 2024, representing 5 percent of total retail revenue, the company said. But net profit in the fourth quarter fell 57 percent to $65 million due to higher lease expenses in Saudi Arabia and Qatar, the company said.

Lulu’s board recommended a dividend of $84.4 million for 2024, subject to shareholders’ approval.

“We also continue to make good progress on our growth strategy … and with our guidance for 2024 remaining unchanged with the fourth quarter a seasonally stronger period,” Lulu’s chief executive Saifee Rupawala told AGBI in an emailed reply last December.