ABU DHABI: Lulu Retail Holdings PLC (“Lulu” or the “Company”), the largest and fastest growing pan GCC full line retailer, on Wednesday announced its financial results for the three-month period ended 31 March 2025 (“Q1 2025”).
Saifee Rupawala, Chief Executive Officer of Lulu, commented: “We are pleased to have demonstrated good growth in the first quarter of this year, with revenue up 7.3 percent YoY. This was underpinned by a combination of like-for-like sales growth, supported by strong trading during the Ramadan period, and our store rollout program, which remains well on track with five stores opened in the quarter, in line with our plan to rollout a total of 20 stores in 2025.
The first quarter also saw Lulu make good progress on delivering on our overall growth strategy, supported by robust sales in Private Label and e-commerce, which remain key components of our strategy.”
“Looking ahead, we expect our growth momentum to continue as we remain focused on several initiatives under each of our four key pillars, 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. Overall, we are pleased with the performance in the first quarter, marking a good start to 2025, and we look forward to continuing to deliver on our strategy throughout the rest of the year.”
Financial summary
Revenue performance driven by LFL sales and new store expansion
Revenue grew a healthy 7.3 percent YoY to $2.1 billion in Q1 2025 driven by LFL sales growth of 3.6 percent, supported by strong trading during the Ramadan period. The good revenue performance was also driven by new store openings and high-volume growth across certain product categories, particularly in fresh food and lifestyle products.
•Fresh food category revenue grew7.9 percent YoY in the first quarter, driven by the Ramadan period, improved consumption trends.
•Electrical goods category witnessed revenue growth of 29.0 percent YoY, mainly due to an increase in sales across higher value items.
•Lifestyle products grew6.9 percent YoY despite pressure as customers opted for more value products.
•Consumer Packaged Goods (CPG) sales grew steadily at 1.4 percent YoY, with the sales increase mainly driven by strong volume growth, which was partly offset by some pricing pressure as a result of promotional campaigns.
•E-commerce remains an important component of Lulu’s growth strategy, with sales +25.3 percent YoY and customer count +26.1 percent YoY.
Segment revenue performance driven by growth across all markets
Lulu delivered revenue growth across all segments in Q1 2025, with particularly strong performances in KSA and Oman.
•The UAE, Lulu’s largest market, recorded a mid-single digit revenue increase of 5.2 percent YoY, led by particularly strong performance in the fresh food segment, which grew 15.6 percent YoY. This was further supported by strong e-commerce sales in the UAE which saw robust growth, rising 40.1 percent YoY, supported by an increase in sales through aggregators.
•In the Kingdom of Saudi Arabia, revenue rose by 10.3 percent YoY, primarily driven by new store openings in last 12 months and strong LFL growth.
Other key markets also delivered solid results in Q1 2025, with revenue in Oman increasing 7.8 percent YoY as a result of strong growth in the electrical goods product category, Qatar up 6.7 percent YoY following a good trading period during festive season, and Kuwait up 4.8 percent YoY, with supermarket sales contributing c.50 percent of overall growth in the region, further supported by a strong uptick in e-commerce sales.
Profitability margins supported by cost efficiencies amidst promotional activity
Gross profit increased 4.0 percent YoY to $464.5 million, with gross margins reaching 22.3 percent in the period, down 70 basis points compared to the prior year. This margin reduction was mainly due to promotional campaigns to drive higher footfall into Lulu stores during the festive period. EBITDA grew 6.4 percent YoY to $214.1 million, supported by improved operational cost efficiencies, which helped offset the lower gross margin. As a result, Q1 2025 EBITDA margin remained broadly stable at 10.3 percent compared to 10.4 percent in Q1 2024. On a post-lease expense basis, EBITDA margin improved by approximately 8 bps, reflecting Lulu’s continued operational discipline. Net profit increased by 15.8 percent to $69.7 million, with net profit margins improving by 25 basis points as a result of stronger EBIT margin and lower interest expense, despite higher taxes in the period.
Robust balance-sheet
During the quarter, net debt decreased to $2.3 billion, with net debt/EBITDA improved from 3.2x in December 2024 to 2.9x at the end of Q1 2025. Excluding lease liabilities, leverage improved from 1.3x to 0.9x over the same period.
Strategic progress
Lulu continues to make good progress on delivering on its growth strategy, having rolled out five new stores in the period, delivered good LFL growth within its existing stores and also benefitting from further upside opportunities across Private Label and e-commerce sales.
During Q1 2025,Lulu opened two hypermarkets and three express stores, adding 22,339sqm of retail space in the period, with the Company’s total retail space up 2 percent to 1.34 million sqm, as at the end of Q1 2025. Within this, Lulu was pleased to open a 10k+sqm hypermarket in Makkah and an express store in Madinah, two uniquely located stores with high footfall given the proximity to religious landmark cities in KSA. In addition to the two stores in KSA, Lulu also opened two express stores in the UAE, alongside a Hypermarket in Bahrain. Lulu remains on track with its store roll out plans, with the Company expending to open a total of 20 stores in 2025, with the remaining 15 stores expected to open over the course of the year.
Lulu is also pleased to have signed a Memorandum of Understanding (MoU) with The Endowment and Minors Trust Foundation (Awqaf Dubai) for the development of a group of retail stores as part of Dubai’s endowment projects. Under the partnership, Lulu will collaborate with Awqaf Dubai on upcoming community projects to develop shopping facilities that will better serve and enhance the retail experience of residents and visitors, while also contributing to Awqaf’s broader social and economic objectives.
Following the successful roll out of its loyalty program across all regions in 2024, Lulu’s Happiness Loyalty program continues to see good momentum in new members, having added c.904k new members in Q1 2025. Lulu now has a total of c.6.3 million loyalty members enrolled onto the program compared to the c.5.5 million at the end of 2024, with the loyalty program linked to c.65 percent of sales.