Strauss Reports Lower Sales but Doubles Net Profit in Q2 2026 Amid Currency and Cost Benefits
Strauss Group closed the second quarter of 2026 with a 6.7% decline in sales to 2.87 billion shekels, yet achieved a sharp improvement in gross and operating profitability, doubling net profit to 195 million shekels. The results were influenced by the strengthening of the shekel, a drop in green coffee prices in Brazil, and the sale of the Elite coffee chain. The company declared a dividend distribution of 180 million shekels, and its stock surged over 5% on the Tel Aviv Stock Exchange.
Excluding currency effects, sales fell by a milder 1.9% compared to the same quarter last year. Gross profit rose 13.6% to 986 million shekels, with the gross margin increasing to 34.4% from 28.3%. Operating profit jumped 41.9% to 363 million shekels, with operating margin rising to 12.6% from 8.3%. A 27 million shekel insurance compensation related to a 2022 salmonella incident also boosted results.
In Israel, sales declined 1.5% to 1.32 billion shekels, mainly due to the sale of the Elite coffee chain and the end of Primor juice distribution. The health and wellness segment stagnated, dropping 0.1% to 804 million shekels, despite launching a 270 million shekel plant for dairy alternatives and a new cow-free milk product under the Cow Free brand. The snacks and confectionery segment grew slightly by 1.8% to 396 million shekels despite significant price hikes driven by cocoa cost increases. Coffee sales in Israel fell 11.1% to 190 million shekels, with a 3.1% decline excluding the Elite chain sale.
International coffee sales dropped 13.1% to 1.33 billion shekels due to currency effects and lower prices in Brazil, but operating profit soared 44.3% to 148 million shekels, lifting operating margin to 11.1% from 5.7%. Strauss Water sales increased 7.1% to 233 million shekels, though operating margin slightly declined. Strauss Water’s 49% owned subsidiary, Haier Strauss Water in China, saw a 9.8% sales decrease and a 26.8% net profit drop.
The company noted significant declines in average cocoa and green coffee prices in the first half and Q2, though prices for Arabica coffee and cocoa rose in July. Milk prices also fell by 5.1% since the end of Q2. Strauss emphasized that raw material price changes impact costs gradually due to procurement and hedging policies.
