Lulu Retail reports 16% net profit growth for Q1  

Lulu Retail Holdings, a leading pan-GCC retailer listed on ADX, on Wednesday announced a strong first quarter for 2025, posting a net profit of $69.7 million, a 16 per cent increase year-on-year (year on year).

The results, which surpassed analysts’ expectations of $65 million according to LSEG data, were driven by robust e-commerce growth in the UAE, strong trading during Ramadan, and an ongoing store expansion programme.

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Revenue for the quarter reached $2.1 billion, up 7.3 per cent year on year, with like-for-like (LFL) sales rising 3.6 per cent, fuelled by heightened demand during the Ramadan period. The company’s strategic initiatives underpinned its performance.

Lulu opened five new stores in Q1, including a hypermarket in Makkah and an express store in Madinah, aligning with its goal of launching 20 stores in 2025. These additions increased total retail space by 2 per cent to 1.34 million square meters. E-commerce sales surged 25.3 per cent year on year to $93.4 million, now accounting for 4.7 per cent of retail revenue, while private label products grew 9.5 per cent year on year, comprising 29.3 per cent of retail revenue.

The Happiness loyalty programme also gained traction, with membership rising to 6.3 million from 5.5 million in 2024, linked to 65 per cent of sales.

Saifee Rupawala, CEO of Lulu, expressed optimism about the results, stating that 7.3 per cent revenue growth reflected strong LFL sales, particularly during Ramadan, and progress in the store rollout programme. “E-commerce and private label sales remain key growth drivers, and we’re on track to open 20 stores this year.”

He added that Lulu’s focus on operational efficiencies and expansion across its four strategic pillars—existing store growth, new stores, private label, and e-commerce—positions the company for sustained momentum in 2025.

Analysts said with a clear focus on expansion, digital growth, and customer loyalty, Lulu Retail is well-positioned to maintain its growth trajectory throughout 2025, capitalising on regional demand and operational strengths

Financially, Lulu demonstrated resilience. Gross profit rose 4 per cent year on year to $464.5 million, though gross margins dipped to 22.3 per cent due to promotional campaigns aimed at boosting footfall during the festive season.

Ebitda increased 6.4 per cent to $214.1 million, with a stable Ebitda margin of 10.3 per cent, supported by operational cost efficiencies. Net profit margins improved by 25 basis points to 3.4 per cent, driven by stronger EBIT margins and lower interest expenses, despite higher taxes. The company’s balance sheet remained robust, with net debt reduced to $2.3 billion and a net debt/ Ebitda ratio improving from 3.2x to 2.9x.

Segment performance was strong across all markets. The UAE, Lulu’s largest market, saw a 5.2 per cent revenue increase, led by a 15.6 per cent surge in fresh food sales and a 40.1 per cent rise in e-commerce sales. Saudi Arabia reported a 10.3 per cent revenue growth, driven by new store openings and solid LFL sales. Oman, Qatar, and Kuwait also performed well, with revenue growth of 7.8 per cent, 6.7 per cent, and 4.8 per cent, respectively, bolstered by strong category performances in electrical goods and supermarkets.

Category-wise, fresh food revenue grew 7.9 per cent, electrical goods soared 29 per cent, and lifestyle products rose 6.9 per cent, despite some consumer preference for value items. Consumer packaged goods grew modestly at 1.4 per cent, impacted by promotional pricing pressures.

Lulu also advanced its strategic partnerships, signing a Memorandum of Understanding with Awqaf Dubai to develop retail stores as part of Dubai’s endowment projects, enhancing community shopping experiences.

Issac John

Staff Writer

issacjohn@khaleejtimes.com

Issac John is Managing Editor at Khaleej Times and has over 45 years of experience in top-tier newspapers across UAE. A seasoned business writer and economic analyst, he brings unmatched insight into the geopolitics and geoeconomics shaping the Gulf and India.