The aggressive cutbacks by the new owners of supermarket chain Shufersal, brothers Yossi and Shlomi Amir, are starting to pay off for them and their shareholders, and big time. This morning, Shufersal reported an extremely sharp rise in its third quarter profit.
Shufersal posted a net profit in the third quarter of this year of NIS 237 million, representing a huge 374% increase over the corresponding quarter of 2023. In the first nine months of 2024, net profit totaled NIS 496 million, 175% more than in the corresponding period last year. The growth in profit is thanks to improvement in the chain’s gross profit margins, and tight management of expenses.
Shufersal’s revenue grew by 6.3% in the third quarter to NIS 1.4 billion. Same store sales rose by 6.5%. The gross profit margin was 28.5%, up from 26.2% in the corresponding quarter. Online sales grew more slowly than general sales, accounting for 17.1% of the total, down from 17.9% in the corresponding quarter.
Operating profit shot up to NIS 330 million, more than double the operating profit of NIS 139 million in the corresponding quarter.
A large contribution to Shufersal’s third quarter profit came from the sale of its 50% stake in payments application Paybox to Discount Bank for NIS 77 million. Shufersal recognized a pre-tax gain of NIS 44 million from the deal. Shufersal also befitted from revaluation gains of NIS 10 million on its properties, and from the sale of non-financial assets for NIS 10 million.
Shufersal has 431 branches around Israel, and employs 15,300 people. Its commercial space totals 553,000 square meters. It has 2.1 million customer club members, and 665,000 holders of its credit card.
So far this year, Shufersal’s share price has more than doubled. The company’s market cap is NIS 9.2 billion. The holding of the Amir brothers’ 24.99% stake was worth NIS 2.3 billion at this morning’s opening, 44% more than the total amount they paid for it.
Published by Globes, Israel business news - en.globes.co.il - on November 26, 2024.
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