Jarir’s Q3 net profit set to rise 13% to SAR 247 mln: Riyad Capital

01/10/2017 Argaam

 

Jarir Marketing Co.’s net profit is forecast to rise by about 13 percent year-on-year (YoY) to SAR 247 million in Q3, Riyad Capital said in a recent note.

 

The brokerage firm maintained a “neutral” rating on Jarir, and kept the target price at SAR 140 per share.

 

“Highlight for Jarir in the third quarter of this year is expected to be the back-to-school season, which has historically boosted revenues and profitability. 2017 has been good for Jarir, recording double digit topline growth as consumer confidence returned and allowances were restored,” the report said.

 

Revenue is expected to jump by 16 percent YoY to SAR 1.76 billion in Q3 on the back of continued higher sales in the smartphones and electronic segments, now that street shops have closed and established retailers are being favored.

 

Gross profit is likely to reach SAR 293 million in Q3, compared to SAR 253 million a year earlier. Gross margins, however, will probably stabilize at 16.6 percent.

 

Jarir generally posts higher profit margin on office and school supplies than it does on electronics, the report said.

 

The company opened four stores in 2017, of which two were launched in Q3.

 

“Two more additions before year-end could make 2017 a stellar year in terms of brick and-mortar growth,” Riyad Capital added.

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