Net income: SAR3.2 million, -98% Y-o-Y, -97% Q-o-Q, -98% versus EFGe Revenue: SAR1,562 million, -3% Y-o-Y, 1% Q-o-Q, -5% versus EFGe Gross profit: SAR184 million, -55% Y-o-Y, -53% Q-o-Q, -54% versus EFGe Operating loss: SAR6.5 million versus profit of SAR213 million in 4Q14/15, SAR109 million in 3Q15/15 and our estimate of SAR169 million   Fawaz Al Hokair reported its 4Q15/16 KPIs, with the company barely breaking even and posting its lowest earnings on record of SAR3 million (-98%, -98% versus EFGe), affected by strong margin compression at KSA operation and sustained losses internationally (SAR89 million in losses this quarter versus SAR92 million in KSA profits), driven by Spanish brand, Blanco, and weaker currencies in several markets, where the company operates (CIS, Egypt, etc.). We estimate that bottom-line would have been in the red had it not been for higher Other Income and lower zakat and taxes Y-o-Y. Revenue dropped 3% Y-o-Y (-5% versus EFGe), as KSA sales fell 7%, which is no surprise, given a high comparable base, as 4Q14/15 was boosted by the impact of the two-month one-off bonus ordered by the new King. Gross margin dropped a whopping 13.5pp to a record low of 11.8%, as the company offered sizeable discounts in KSA (where margins fell 12.2pp alone) to offload the prior season’s inventory. Accordingly, gross profit fell 55% Y-o-Y (-54% versus EFGe). Operating profit was in the red despite flattish SG&A costs, given the strong gross margin contraction.   A very alarming results set, while international losses were sizeable (SAR236 million for the full year versus a reported bottom-line of SAR616 million); these came as no big surprise, as we expected continued clean-up efforts at Blanco and the US, as well as CIS currencies’ devaluation to weigh on numbers. The big shocker was the massive drop in KSA margins, which could signal a shift in the trading environment, where the company has to offer excessive discounts to drive sales. (Earnings release, Hatem Alaa, Nada Amin)