Riyadh, Saudi Arabia - August 07, 2025: Cenomi Retail posted a modest uptick in revenue for the first half of the year as gains across international markets and a strengthening digital footprint helped balance ongoing domestic pressures and the costs of a broad transformation strategy.

The company reported revenue of SAR 2.5 billion for the six-month period ending June 30, representing a 2 percent increase from the same time last year. That growth was largely supported by a 17.9 percent rise in international sales, alongside a 15.7 percent increase in online revenues, with digital performance continuing to benefit from platform improvements and evolving consumer behavior.

Zara and the wider Inditex portfolio continued to be strong performers. Group-level like-for-like sales rose by 3.7 percent in the period. At the same time, the company’s food and beverage business recorded notable growth in digital channels, with Subway’s online sales climbing by over 300 percent and Cinnabon also reporting a double-digit jump.

“Our first-half performance demonstrates the ongoing execution of our transformation strategy and disciplined focus on operational excellence. Our Tier 1 Champion brands, led by ZARA and Inditex, delivered strong like-for-like growth. Online sales gained further momentum, while our F&B segment delivered robust online growth across brands such as Cinnabon and Subway. While our bottom line was impacted by FX loss and tax liability settlement, we remain steadfast in our commitment to deleveraging the balance sheet, driving sustainable long-term value creation for shareholders, and deepening engagement with all stakeholders,” said Salim Fakhouri, Chief Executive Officer at Cenomi Retail.

Despite gains in gross profit and revenue per store, the company reported a net loss of SAR 83.2 million, compared to a loss of SAR 67.6 million a year earlier. The decline in profitability stemmed primarily from currency fluctuations due to euro appreciation and a tax liability settlement incurred during the second quarter. Cenomi’s EBITDA fell to SAR 139.2 million, marking a 34.4 percent drop from the previous year. The same period last year had been positively affected by a one-off capital gain of SAR 165 million tied to a brand divestment program. That initiative, introduced in 2024 as part of the company's “Fix the House” strategy, involved the sale of non-core assets to refocus on core brands and markets.

Gross profit for the first half came in at SAR 367 million, up 21.5 percent year-on-year. This was supported by a 2.4 percentage point improvement in gross margin, which rose to 14.9 percent. However, revenue in the second quarter fell 7 percent compared to Q2 last year, largely due to the earlier timing of Ramadan, which pulled seasonal spending forward into the first quarter. EBITDA for the second quarter dropped sharply to SAR 23.1 million, down from SAR 216 million in the same period last year.

The company's store footprint shrank by 17.1 percent compared to the previous year, ending the period with 789 stores. This contraction reflected a deliberate streamlining of operations as Cenomi continued to close underperforming or non-strategic locations. Revenue per store, however, increased substantially, rising by more than 23 percent in the first half. The increase was driven by improvements in both domestic and international performance, where store productivity and location mix were optimized.

While Cenomi reduced its store count, it also pursued selective expansion in premium retail corridors. The company opened a new Massimo Dutti store in Saudi Arabia during the first half, along with 11 food and beverage outlets across Subway and Cinnabon in the second quarter. These new locations, focused on high-traffic areas, reflect the company’s broader effort to align its footprint with market demand and brand performance.

Online sales continued to gain traction, reaching SAR 195.6 million for the half-year period. Performance in this segment was driven by Zara and Inditex brands, which posted a 34 percent year-on-year increase, while Subway and Cinnabon delivered strong online growth, particularly in the second quarter. Cenomi said the rise in digital sales reflected shifting consumer preferences as well as its continued investment in omnichannel capabilities.

International retail revenue reached SAR 663.1 million for the period, a 17.9 percent gain from the year before. Markets such as Uzbekistan, Georgia and Azerbaijan delivered strong contributions, with second-quarter revenue up by double digits in each. These gains helped offset a 2.7 percent decline in domestic retail revenue, which totaled SAR 1.6 billion in the first half. The company attributed the domestic decline to the calendar impact of Ramadan falling entirely in Q1 this year.

The food and beverage business generated SAR 163.4 million in revenue during the period, a 3.9 percent drop from the prior year. Revenue held steady in the second quarter, supported by promotional campaigns and product launches aimed at refreshing customer engagement.

Cenomi ended the half with SAR 1.5 billion in net debt, slightly below its position at the end of 2024. The company maintained a cautious approach to cash and capital allocation as it navigated through the next phase of its transformation plan. The net debt to EBITDA ratio increased to 3.9 times, reflecting reduced earnings and temporary pressures from non-operating charges.

In July, shortly after the close of the reporting period, the company announced a major shift in ownership. Cenomi’s founding shareholders signed a share purchase agreement with UAE-based Al-Futtaim for the sale of a 49.95 percent stake in the company, in a deal valued at more than SAR 2.5 billion. As part of the transaction, Al-Futtaim is expected to extend a shareholder loan of at least SAR 1.3 billion upon closing. The deal, which remains subject to regulatory approvals, is seen as a key milestone in Cenomi’s strategic roadmap and a vote of confidence in its long-term potential.

The company is now entering the second phase of its transformation program, referred to as “Embark on Growth.” The focus will be on scaling successful fashion and food brands, entering new high-potential markets, and driving top-line expansion across its core geographies. Executives said Cenomi will continue to pursue operational efficiencies while prioritizing disciplined expansion and deeper digital integration.