Max Stock Reports Strong Sales Growth and Sharp Profitability Rise in Q2

Max Stock, the discount retail chain with 65 stores including 40 self-operated outlets, reported significant financial growth in the second quarter. Sales increased by 12.7% to 379 million shekels, driven by the opening of three new stores and a 7% rise in sales at existing locations. The average basket size also grew by 2.8%. Despite Passover falling in Q1 this year compared to Q2 last year, the company maintained strong momentum.

The weakening of the US dollar boosted Max Stock's gross profit by 21.3% to 178.4 million shekels, raising the gross margin to 47.1% from 43.8% in the previous year. Operational profit surged 36% to 76.9 million shekels, with operating margin climbing to 20.3% from 16.9%. Improvements in trade terms and reduced logistics expenses, following a move to a new logistics center, also contributed to profitability. However, financing costs rose 42.5% to 35.5 million shekels due to losses on dollar hedging transactions, with potential for further expenses if the dollar continues to decline.

Net profit attributable to shareholders jumped 35.7% to 32.6 million shekels. The company declared a dividend distribution of 50 million shekels. Max Stock plans to hold a shareholders meeting next month to approve changes to executive compensation policies and update CEO Uri Max's terms, including stock option and restricted share grants. The company allocated over 1.3 million options and 300,000 restricted shares to 35 employees and executives.

Additionally, Eliak Kaplan was promoted to deputy CEO while retaining his responsibilities for logistics and human resources. CEO Uri Max highlighted ongoing store expansion and product mix improvements, noting recent successful openings in Beersheba, Or Akiva, and a franchise store in Hod Hasharon. The chain aims to open five more company-owned stores by the end of 2027 to expand its national footprint.