Riyadh – Mubasher: Al Rajhi Capital expected that like-for-like (LFL) sales of Herfy Food Services Co are likely to fall in the future after cutting allowances which gives a fillip to discretionary purchases, including quick service restaurants (QSR).

LFL sales are expected to post growth starting 2018, Al Rajhi Capital said.

Al Rajhi Capital maintained its valuation on Herfy at “Neutral", upgrading its price target (PT) from SAR 83.1 to SAR 84.9.

Herfy’s Q1 profits worth SAR 52.7 million were below estimates of the research firm of SAR 56.4.

The research firm expected that the pace of store additions would decrease to 24 stores in 2017, after adding four stores in Q1-17, which is the lowest quarterly addition in the last three years.

“Faster than anticipated uptick in consumer spending represents a key upside risk for revenue and earnings estimates,” the report said.

Herfy Food Services Co saw a fall of 1.2% in net profits to SAR 52.7 million in Q1-17 from SAR 53.35 million in Q1-16.