Al Othaim returns to profit in September with SAR 49M, targets recovery, growth

Logo of Abdullah Al Othaim Markets Co. 

Abdullah Al Othaim Markets Co. said it achieved a performance turnaround in Q3 2026, returning to profitability in September with net profit of approximately SAR 49 million, including SAR 31 million in operating profit from its core business, following losses of approximately SAR 88 million in July and August.

In a statement to shareholders, the company explained that the quarter was marked by operational challenges stemming from the technology transformation project initiated in Q2. These included difficulties in ensuring accurate merchandise deliveries to stores, which affected the availability of certain products at the right time and location, resulting in lost sales early in the quarter.

The company added that it addressed these challenges through an urgent corrective action plan that helped mitigate their impact and restore profitability before the end of the quarter. Sales in Saudi Arabia grew nearly 10% to approximately SAR 815 million in September, compared with around SAR 740 million in July.

August recorded the strongest sales performance of the quarter, with a decline of no more than 3% year-on-year (YoY), supported by preparations for the back-to-school season. Wholesale sales also recovered from a decline of approximately 31% in July to growth of around 8% in August and 20% in September. Meanwhile, e-commerce maintained its growth momentum, with sales rising approximately 56% YoY in Q3.

Total inventory declined nearly SAR 234 million from approximately SAR 1.61 billion at the end of July to SAR 1.37 billion at the end of September. Inventory days also improved from approximately 87 to 68 days. Operating profit margins were temporarily affected by inventory clearance efforts, the company noted, confirming that no additional inventory provisions were recorded in Q3 beyond the provisions recognized in Q2.

The company highlighted that the improvement was achieved within a relatively short period following the appointment of the new executive management on Aug. 19, 2026, reflecting the efforts of management and teams across various departments and their commitment to a clearly prioritized corrective action plan. It confirmed that several fundamental challenges affecting quarterly performance had been resolved.

The company outlined the key pillars of its transformation plan, including completing the resolution of challenges associated with the technology transformation project, improving data accuracy and system stability, enhancing store readiness, upgrading planning, ordering and inventory management processes, and strengthening spending and cost controls. The plan also focuses on improving the efficiency of digital sales channels and linking incentives to performance and results.

As part of its digital channel development strategy, the company plans to launch a completely revamped version of its Speedy app in Q1 2027. Development began in February 2026, with the new version designed to offer rapid delivery services and additional features aimed at enhancing customer experience, strengthening engagement with the Al Othaim brand and supporting the profitability of digital channels.

The company affirmed that its international supply chains remained stable despite geopolitical tensions in the region, with no material disruptions to import flows or the availability of essential goods, citing diversified sourcing and strong supplier partnerships.

The company expects the benefits of its corrective measures to appear gradually in performance over the coming periods, alongside efforts to improve profit margins, enhance efficiency, leverage technology and achieve operational excellence. Other priorities include improving customer experience, strengthening the competitiveness of promotional offers, developing logistics infrastructure through the Al Othaim Logistics City project and expanding digital sales channels.

The company emphasized that the progress achieved marks the beginning of its recovery and return to growth, reaffirming its commitment to completing its corrective and development initiatives and driving operational transformation to enhance business efficiency and sustain growth.

According to data compiled by Argaam, the company previously reported losses of SAR 92.73 million for the first nine months of 2026, including a Q3 loss of SAR 39.26 million.