Jarir seen to post 3-5% profit growth in 2024: Chairman

Jarir Marketing Co. is expected to continue posting profit and sales growth by the end of 2024, Chairman Muhammad Alagil told Asharq News TV.

He added that sales exceeded SAR 10 billion last year, which indicates that outlook will be more cautious for the company.

The retailer is likely to post a 3-5% rise in 2024 earnings, Alagil said, noting that the launch of the "Buy Now, Pay Later" option in most GCC countries contributed to a nearly 90% leap in installment sales in the second quarter.

Sales of video games and TVs increased in Q2 2024, while sales of school supplies were stronger in the first quarter driven by seasonality.

Alagil confirmed that 25% of sales in Saudi Arabia were made through installments, which is a fundamental change that increases costs on one hand and boosts sales on the other. "Since return on services and exhibitions is usually stable, earnings increase," he noted.

The Chairman underscored the growth of e-commerce in the GCC and Saudi Arabia, expecting e-commerce to exceed SAR 2.5 billion in 2024, as e-commerce accounted for 25% of the company's total sales.

The new products of phone and computer companies will incorporate artificial intelligence technologies, which indicates that their sales will grow in the third and fourth quarters.

Jarir ranked first in terms of goods delivery in the region, thanks to its success in delivery, execution, and quality, the Chairman said. He added that the firm strives to be number one in in e-commerce regionally.

The retailer currently owns 17 showrooms in the Kingdom, representing more than 20% of its total showrooms. Most of the showrooms are rented in good locations, with good prices and low book value.

Alagil expects the opening of four showrooms this year and five in 2025, indicating that the company plans to have 20% to 25% of its showrooms built, but it prefers renting to continue boosting returns. Therefore, the new showrooms will be rented.

Clients' purchases will decline slightly, but the number of showroom visitors is increasing, the Chairman said, noting that the country is witnessing increasing consumption, strong economy and population growth, which signals a source of growth for the company.

Jarir reported a net profit of SAR 390.4 million for H1 2024, a decline of 3.3% from SAR 403.5 million a year earlier. The second-quarter net earnings increased by 10% to SAR 171.1 million from SAR 155.7 million in Q2 2023, according to data available with Argaam.