Jarir Q1 2019 profit beats forecasts on higher revenue: Riyad Cap

Jarir Marketing Co.’s Q1 2019 net profit of SAR 234 million came above Riyad Capital's estimate of SAR 225 million on an 18 percent year-on-year rise in revenue, the research firm said in a report on Sunday.

The retailer's revenue hit SAR 1.89 billion as smartphone and computer sales continued to post strong growth.

Gross margins unexpectedly expanded to 16 percent in Q1 2019 from 15.2 percent a year earlier.

This was mainly attributed to IFRS related reclassification of costs rather than improvement in product margins, it added.

"We have increased our revenue and profit forecasts going forward as Jarir is benefitting from consolidation and organic growth through more stores. We now expect 2019 net income at just over SAR 1 billion," Riyad Capital added.

The brokerage firm remained "neutral" on Jarir, but upped the stock's target price to SAR 167 to SAR 153.