Net income: SAR220mn, +1% Y-o-Y, +71% Q-o-Q, +3% vs. EFGe Revenue: SAR1,520.9mn, -1% Y-o-Y, 9% Q-o-Q, +4% vs. EFGe Operating profit: SAR214.5mn, -1% Y-o-Y, +85% Q-o-Q, +3% vs. EFGe   Jarir reported a decent set of 3Q16 numbers with flattish earnings Y-o-Y (+1%; +71% sequentially due to seasonality as 3Q has high sales of office and school supplies due to the back-to-school season; +3% vs. EFGe), driven by flat operating metrics, as well as higher rental and other operating income. Revenue was also flat at -1% Y-o-Y (+4% vs. EFGe), in line with 2Q16 trends despite the market-wide weakness. Jarir opened four showrooms YTD (two in the quarter) and remains committed to its expansion plans. The company also provided an update on its Jeddah showroom that had a fire incident on 18 September 2016: estimated losses are SAR25.2mn (including lost sales), but will be fully covered by insurance, and the showroom still remains closed.   Margins were flat across the board, reversing the strong declining trend in 1H16. Gross profit was flat Y-o-Y (+2% vs. EFGe), with gross margin nearly the same as last year (+10bps) at 16.6% (vs. EFGe: 17.0%), indicating that sales mix was largely unchanged, and there were no markdowns. EBIT was also flattish (-1%; +3% vs. EFGe), with EBIT margin exactly the same as last year at 14.1% (vs. EFGe: 14.3%). A key positive was that SG&A costs were up only 2% Y-o-Y after increasing 22% in 1H16 indicating lesser needs for promotions in the quarter (opex control has been one of Jarir’s key strong traits historically – SG&A costs increased c7% Y-o-Y on average in the past four years).   This is a decent results set, in light of weak discretionary spending trends (due to subsidy, public sector wage reforms), and we believe it was mainly supported by Jarir’s school supplies business that likely did not slow down (supplies business accounted for roughly a third of top-line, but nearly 60% of bottom-line in the last couple of years). However, it is difficult to assess how sustainable this quarter’s trends are in light of changing market dynamics. We will be revising our numbers when full financials are available. (Hatem Alaa, Nada Amin)   Jarir Marketing Co.: SAR82.00 as of 06 October 2016, Rating: Neutral, FV: SAR127.00 per share, MCap: USD1,968mn, JARIR AB / 4190.SE