Saudi retailer Fawaz Alhokair Q1 net profit rises 0.9 pct
today Jul 27, 2016
Saudi Arabian retailer Fawaz Abdulaziz Alhokair Co reported a 0.9 percent rise in first-quarter net profit on Wednesday as sales increased at its outlets in the kingdom.
The company made a net profit of 212.6 million riyals ($56.7 million) in the three months to June 30, up from 210.8 million riyals in the year-earlier period, according to a bourse filing. Alhokair's financial year starts on Apr. 1.
EFG Hermes forecast the company would make a quarterly profit of 170.1 million riyals during the quarter, while NCB Capital estimated a profit of 190.0 million riyals.
Alhokair, which owns franchise rights for brands including Mango, Zara and Banana Republic in the Middle East, said its quarterly profit rise was due to increasing sales in Saudi Arabia due to more stores and also the boost from the holy month of Ramadan.
These factors helped offset the negative impact from an increased inventory provision, which lifted the cost of sales, as well as a 27 million riyal charge following the sale of Spanish brand Blanco in the quarter.
Quarterly sales rose 17.1 percent year on year to 2.2 billion riyals.
Retail names in Saudi Arabia have struggled in the first half of 2016 as a protracted slump in oil prices put government and consumer spending under pressure, while a two-month salary bump to government employees which boosted retail sales in early 2015 wasn't repeated.
Jarir Marketing, another large retailer in the kingdom, reported a 17 percent fall in second-quarter earnings on July 12. ($1 = 3.7510 riyals)
© Thomson Reuters 2019 All rights reserved.