Leejam Sports Company (1830.SE): Members growth resumes (+8% y/y) but aggressive expansion plan continues to weigh down on margins y/y

Research evidence excerpt

Leejam Sports Company (1830.SE): Members growth resumes (+8% y/y) but aggressive expansion plan continues to weigh down on margins y/y

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28 Jul 2026 01:47:10 ET │ 10 pages

Leejam Sports Company (1830.SE)

Members growth resumes (+8% y/y) but aggressive expansion plan

continues to weigh down on margins y/y

CITI'S TAKE Neutral

Price (27 Jul 26 15:00) SAR70.15 Leejam reported Q2 26A results with revenues at SAR 411m (+9% y/y and

Target price SAR95.00 +11% q/q) driven by network expansion (+23 fitness centers y/y) and

members growth of 8% y/y and 21% q/q - male subscriptions revenue Expected share price return 35.4%

increased 6% y/y and females by 23% y/y. Gross profit increased 4% y/y to Expected dividend yield 5.4%

SAR 141m implying 160bps gross margin compression but a 230bps q/q Expected total return 40.8%

improvement. EBIT arrived at SAR 93m (flat y/y) impacted by growth in Market Cap SAR3,675M

SG&A costs as the company continues to expand its network and increase US$979M

investment in infrastructure and IT. As a result, net income came in at SAR

63m (-13% y/y) impacted by higher finance expenses as debt levels

increase driven by higher CAPEX as expansions continue. We have a

Neutral rating. Michel SalamehAC

+971-4509-9587

Implications — Q2 numbers saw improvement from a weak Q1 which was impacted michel.salameh@citi.com

by seasonal factors. More importantly, total members grew 8% y/y and 21% q/q as

recently launched centers continue to mature but gross margin is still declining y/y

on aggressive expansion plan. Revenue per member declined 2% y/y likely on

promotional activity as the company looks to attract new customers and retain

existing ones. Overall trends improve sequentially but still exhibit y/y weakness