Israel's biggest retail chain Shufersal Ltd. (TASE:SAE) ended the first quarter of 2024 with an improvement in all its main parameters including a 35% jump in net profit to NIS 89 million.
Towards the end of the quarter the Amir brothers - Yossi and Shlomi - completed their takeover of the company, the latest financial results do not reflect their operations. The Amir brothers became co-CEOs at the start of April while the chairman Itzik Abercohen and CEO Ori Waterman have since left along with other senior management.
Under the old management Shufersal reported NIS 3.8 billion revenue in the first quarter of 2023,up 1.8% from the first quarter of 2023, even though the Passover holiday fell deep in the second quarter this year. The company said that higher revenue stemmed from the opening of new branches and increased sales in existing branches.
However, revenue fell from NIS 3.9 billion in the fourth quarter of 2023 when customers made panic purchases following the outbreak of the war.
Sales per square meter in Shufersal branches, which peaked in 2020 during the Covid pandemic, at NIS 27,900 per square meter have eroded in recent years to NIS 25,200 last year, and also in the first quarter. In the online sector, Shufersal's "non-food" activity has been cut as part of a strategy to focus on profits, and the proportion of revenue it generated from total sales fell to 18.7% from 19.3% in the corresponding quarter last year.
Shufersal's share price was up 0.94% today, giving a market cap of NIS 6.6 billion, up 50% from the start of the year, mainly due to the takeover by the Amir brothers, after the chain operated for several years without a controlling shareholder. Since completing their takeover in February, the Amir brothers have already made NIS 150 million, on paper, on their investment. The Amir brothers are confident that with further streamlining they can increase Shufersal's profitability.
Published by Globes, Israel business news - en.globes.co.il - on May 28, 2024.
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