Reduced sales of smartphones, IT products hit top-line
Jarir Marketing’s top-line in 1Q22 decreased 10% YoY to SAR 2,286.9mn, missing our estimate by 15%. On QoQ basis, it inched down 1%. Lower sales of samartphones, computers, video games and related accessories more than offset an increase in sales of school and office supplies, thereby leading to a decline in overall revenue.
Gross profit falls at a relatively lower pace, aided by favorable sales mix
Gross profit slipped c.4% YoY, slightly missing our estimate, supported by a favorable change in sales mix which was tilted towards higher margin products. However, due to an increase in S&D expenses, operating profit fell at a relatively higher pace (-6% YoY), missing our estimate by 8%.
Net profit dips 6% YoY; ~8% miss
Overall, net profit decreased 6% YoY and 4% QoQ to SAR 251.3mn in 1Q22, below our estimate of SAR 273.2mn.