Shufersal Stock Plummets 11% After Weak Second Quarter Results

Shufersal's stock experienced a significant drop of 11% over the last two trading days of the previous week, resulting in a market value loss of 1.3 billion shekels, bringing its total market capitalization to 10 billion shekels. This decline followed the release of disappointing financial results for the second quarter and the first half of 2026. Year-to-date, the stock's performance has been close to zero, leaning towards negative territory.

The supermarket chain, controlled by brothers Yossi and Shlomi Amir, has been undergoing a period of streamlining and establishing a new discount chain called 'Universe'. Despite initial profit increases from cost-cutting measures, the past year has seen Shufersal report declining same-store sales almost every quarter, a key industry metric. This trend may indicate a shift in consumer preferences.

In the second quarter, Shufersal's revenue decreased by 7.5% to 3.4 billion shekels. For the first half of the year, revenues stood at 7.1 billion shekels, a 2% decrease compared to the same period last year. The company attributed the sales weakness to factors such as the timing of the Passover holiday, a slowdown in sales impact from a previous "Roaring Lion" promotion, ongoing store renovations, the closure of unprofitable branches, and the implementation of new logistics and distribution technologies.

The most striking indicator of Shufersal's struggles is the decline in same-store sales, which fell by over 8.5% in the last quarter and 2.7% in the first half. In contrast, other publicly traded food chains like Rami Levy, Yohananof, Tiv Ta'am, and Victory all reported increases in same-store sales and net profit during the same periods, while Shufersal's net profit dropped by 14%. Shufersal's private label sales, however, saw an increase from 17.8% to 20.4% of total revenue.

Shufersal is actively implementing a strategy under the Amir brothers' leadership, which includes converting 30 large discount stores to the 'Universe' format. This conversion process, along with store closures and renovations, is cited as a primary reason for the decline in same-store sales. The company is also focusing on importing fresh meat from South America and expanding its non-food import business, such as LEGO, which analysts believe could gradually help Shufersal regain its market position. Despite the recent downturn, one analyst maintained an 'outperform' rating, citing potential for future profitability improvement and real estate value.