Lulu Retail revenue for 2024 grows 4.7% to $7.6bn

The Middle East retail giant saw a substantial uptick in Private Label revenue and e-commerce sales. Contribution from higher-margin Private Label products reached 29.6 per cent of total retail revenue in 2024, a 110 bps increase YoY, while e-commerce sales grew 70 per cent to $325.6 million, approximately 4.5 per cent of total retail sales.

EBITDA increased by 4.4 per cent for the entire year to $786.3 million, with stable margins of 10.32 per cent, driven by an improvement in gross margins and offset by higher operating expenses from lease modifications in KSA and Qatar, where lease costs are now recognised as an Operating Expenditure rather than Depreciation on Right-of-Use Assets and Interest on Lease Liabilities.

Strong results and momentum

EBITDA margins expanded by 118 bps to 6.3 per cent on a lease-adjusted basis, driven by operational performance. Lulu’s strong EBITDA performance in FY 2024 was supported by approximately 20 bps Gross Margin expansion in the period because of its product mix and an increase in sales across higher-margin categories, including Private Label products, which span across fresh food, consumer packaged goods, lifestyle products, and electrical goods.

EBITDA for Q4 2024 totalled $219.2 million, up 0.6 per cent YoY, with an EBITDA margin of 11.57 per cent, compared to 11.71 per cent in the same period last year.

Net Profit from Continuing Operations saw a 12.6 per cent YoY jump to $216.3 million in FY 2024, with net profit margin improving by 20 bps to 2.8 per cent. Net Profit for Q4 2024 reached $64.7 million, down 38.1 per cent, mainly due to slower revenue growth and higher interest charges resulting from increased working capital debt.

Commenting on the results, Saifee Rupawala, Chief Executive Officer of Lulu Retail, said: “The past 12 months have been transformative for Lulu Retail, underpinned by our significantly oversubscribed IPO on the ADX and robust growth across all aspects of our business.

“Our focus on expanding our store network which now totals 250 stores across the GCC and investing in higher-margin categories, coupled with the rapid evolution of our e-commerce platform, has delivered strong results. Our Happiness Loyalty Programme, which now has over 5.5 million members, continues to elevate customer engagement.

“As we look toward 2025, we remain confident in our ability to build on this momentum, leveraging our operational strength and market leadership to capture new opportunities and create lasting value for our investors and customers alike.”

New stores and loyalty

The company made good progress on new store rollouts, opening 21 new stores during the year, including nine in the fourth quarter. This included six hypermarkets, 12 express stores, and three mini-markets, which increased the total selling space by approximately 5 per cent YoY to 1.3 million square meters.

Approximately 70 per cent of Lulu stores opened in FY 2024 are within the express and mini-market store format, further supporting its transition to an asset-light model.

Lulu’s gradual transition to an asset-light model, which requires lower investment, reflected in its capital expenditure for FY 2024. It was down to $136.7 million, or 1.8 per cent of total revenue, compared to $149.5 million in FY 2023 (2.1 per cent of revenue).

Cash Flow reached $649.7 million in FY 2024, with a healthy cash conversion ratio of 82.6 per cent, an improvement of 245 bps compared to FY 2023.

Lulu Happiness Loyalty programme membership grew significantly, with nearly 5.5 million members across all GCC countries. The programme was launched in January 2023, and had 1.1 million at the end of that year. It has been instrumental in driving higher average basket sizes and enhancing customer retention, with approximately 65 per cent of revenue linked to loyalty members during December 2024.

The Board of Directors has recommended a dividend of $84.4 million, equating to 3fils per share.