Jarir’s Q3 earnings in line with estimates: Aljazira Capital

Jarir Marketing Company’s net income of SAR 305 million in the third quarter 2019 was in-line with Aljazira Capital’s estimate of SAR 306.3 million.

The company’s overall sales increased, driven by electronics section led by smartphone sales.

Increase in the number of showrooms (53 in Q3 2018 to 59 in Q3 2019) contributed to the rise in overall sales, it added. However, operating margin declined due to promotional price offers and change in sales mix.

Aljazira Capital expects Jarir’s margins to remain under pressure due to higher costs, resulting from employment of Saudis, and higher selling and marketing expenses.

The brokerage maintained its “neutral” recommendation on the stock, setting a target price of SAR 168 per share.