Farm Superstores 2Q16 earnings drop 17% Y-o-Y on margin pressures
Saudi Marketing Company (Farm Superstores) [4006.SE] reported 2Q16 KPIs, with earnings down 17% Y-o-Y to SAR27.2mn due to lower revenue from high-margin household items (wholesale) and entertainment centres, in addition to margin pressures from discounts and promotions offered during the quarter. Revenue was flattish (+2% Y-o-Y) and came in at SAR525mn, while gross profit decreased 7% Y-o-Y to SAR114.2mn, with gross margin shrinking c2.2pps at 21.7%. Meanwhile, operating profit fell 16% to SAR28.7mn, with operating margin narrowing c1.2pps to 5.5% as. The quarter was also affected negatively by higher losses from the company’s Lebanese subsidiary. (Tadawul)
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