Riyadh, Saudi Arabia, 13 May 2025: Cenomi Retail, the Kingdom's pioneering retail brand partner, today announced its financial results for the first quarter ended 31 March 2025 ('Q1-25'), reporting revenues of SAR 1.3 billion, an increase of +11.2% year-on-year ('YoY'), and a return to profitability with a positive EBITDA of SAR 116.1 million and Net Profit of SAR 1.8 million.

EBITDA improvement was driven by a significant turnaround in the Kingdom of Saudi Arabia ('KSA') retail segment, shifting from a negative SAR 27.8 million in Q1-24 to a positive SAR 98.1 million in Q1-25. In contrast, international EBITDA saw a decline from SAR 19.8 million in Q1-24 to SAR 13.8 million in Q1-25, reflecting normalization after a full quarter of end-of-season promotions. The Food & Beverage ('F&B') segment remained stable, delivering SAR 4.3 million in EBITDA in both Q1-24 and Q1-25, despite the temporary impact of brand optimization efforts.

Salim Fakhouri, Chief Executive Officer at Cenomi Retail, commented: 'Cenomi Retail's return to profitability in Q1 2025 is a clear reflection of the disciplined execution of our turnaround strategy, with EBITDA reaching SAR 116.1 million, compared to a negative SAR 3.7 million in the same period last year. This performance highlights our ability to drive sustainable operational improvement by optimizing resources and focusing on value-generating initiatives.

Our results this quarter were led by a strong recovery in the Kingdom of Saudi Arabia, compared to Q1-24, which was significantly impacted by geopolitical conditions. In Q1-25, we saw the tangible impact of our portfolio optimization efforts. By implementing the right tactical retail strategy and aligning with evolving customer demand, we achieved a significant turnaround in KSA retail EBITDA, the key driver of our Group profitability.

International operations delivered normalized performance in a quarter typically characterized by end-of-season promotions and discounting. This followed last year's one-off launch effects and reaffirmed the stability and potential of our diversified geographic footprint. The F&B segment remained stable despite the temporary impact of the brand optimization program. We recognize the need to divest additional underperforming F&B brands to further support margin enhancement, while simultaneously working to develop a more focused growth strategy around our core F&B portfolio.

Cenomi Retail remains committed to enhancing topline performance both locally and internationally through brand positioning, disciplined portfolio management, and strategic retail execution aimed at maximizing performance during high-demand periods.'

 

Cinnabon is showing initial indicators of potential recovery, supported by targeted marketing campaigns and promotional offers during the holy month of Ramadan, aimed at expanding reach and engaging new customer segments. Subway continued its positive momentum, leveraging its national footprint of 61 stores and delivering a 3.9% LFL revenue increase in Q1-25, demonstrating the strength of the brand in the quick service category.

Online sales reached SAR 111.2 million in Q1-25, marking a 21.8% increase YoY. Online sales contribution to total revenue (including F&B) rose from 7.6% in Q1-24 to 8.3% in Q1-25, highlighting steady digital channel expansion.

In the fashion segment, Zara's online revenue grew 55.2% YoY, while other Inditex brands recorded a 59.5% YoY increase, reflecting strong demand through Cenomi's digital platforms.

 

In the F&B segment, Subway posted exceptional online growth of over 300%, benefiting from increased demand during Ramadan and stronger presence across delivery platforms.

           

 

Gross Profit reached SAR 177.8 million in Q1-25, with a gross margin of 13.3%, marking a 88.0% increase YoY. The margin improved by 5.4pp, rising from 7.9% in Q1-24, effectively offsetting the impact of geopolitical headwinds that had weighed on topline performance in Q1-24. This uplift was supported by higher sales, continued cost optimization efforts, and improved operational efficiency, and reduction in the store network which led to a reduction in Utilities and Maintenance by 51.9 % in addition to 1.1% reduction in employees' salaries & benefits, and a decline of 3.0% in rent expenses.

Of the closures:

By segment, 33 stores were closed in KSA Retail, 30 in International Retail, and 12 in F&B. As part of its continued international footprint optimization, Cenomi exited several non-prime locations, including the complete withdrawal from '28 Mall' in Azerbaijan, reinforcing its strategic focus on profitability and high-quality retail locations.

Following these changes, the company operated 808 stores at the end of Q1-25, a reduction of 23.9% YoY, in alignment with its brand optimization program.

In Q1-25, Mango store reopened after renovation in the Nakheel Mall, in line the implemented strategy of renovating prime locations which included a new man's department , fitting roams and a structural design to provide better customer experience .

Continued Brand Optimization progress update

In Q1-25, Cenomi Retail divested three non-core brands — Ipekyol, Twist, and Machka — generating a capital gain of SAR 22 million. These brands were transferred to their brand partners, resulting in the transfer of ownership of 21 stores. In line with the Group's strategic focus on streamlining its international footprint, Cenomi has also exited operations in the United States, which is no longer an active market for the company.

 

Cenomi Retail will continue advancing along its strategic trajectory in the retail and fashion segment by focusing on selective store openings in prime locations, while reinforcing operational efficiency and maintaining its cost optimization program.

The F&B strategy will remain anchored around four key pillars: