Shufersal reports weak results

The supermarket chain blames the timing of Passover for the fall in first quarter profit.

Supermarket chain Shufersal Ltd. (TASE:SAE)released its first quarter results this morning. Revenue fell 5.9% to NIS 2.8 billion, compared with NIS 2.98 billion in the first quarter of 2013. Net profit plunged 41% to NIS 32 million, compared with NIS 55 million in the corresponding quarter.

In its report, the company's board of directors notes the fact that the Passover holiday, in advance of which consumer spending is usually high, fell in the second quarter this year, whereas last year it was in the first. The report also mentions growing price competition, a fall in Israel's economic growth rate, and regulatory developments as factors affecting its results. "Since the beginning of 2014, there has been a noticeable slowdown in consumption in the Israeli food market, causing a fall in the company's sales in the reporting period in comparison with the corresponding period," the report states.

Shufersal's sales, marketing and administration costs totaled NIS 663 million in the first quarter of this year, compared with NIS 648 million in the first quarter of 2013. Expenses as a proportion of revenue were 23.6%.

Cash flow from operations fell sharply to NIS 304 million, from NIS 502 million in the corresponding quarter, mainly because of the different timing of the Passover holiday.

Published by Globes [online], Israel business news - www.globes-online.com - on May 12, 2014

© Copyright of Globes Publisher Itonut (1983) Ltd. 2013

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