Castro Group Doubles Net Profit in Q2 2026, Explores Cosmetics Sector Expansion

Castro- Hodis Group reported a 15% increase in revenues for the second quarter of 2026, reaching 580.5 million shekels compared to 504 million shekels in the same period last year. The net profit nearly doubled to 44.6 million shekels. This growth was supported by an increase in the number of stores and retail space, with the group operating 361 stores and kiosks in Israel by the end of June, up from 355 at the start of the year.

Despite the overall revenue growth, same-store sales declined by 1.9% including online sales and by 3% in physical stores during the quarter, primarily due to the impact of Operation Lion's Roar in the first quarter, which affected the first half-year results. Without adjusting for days lost to security issues, same-store sales would have increased by 10.3% in the quarter. For the first half of the year, the decline was sharper, with a 5.4% drop including online and 7.1% excluding it.

Among the group's brands, Urbanica showed significant revenue growth to approximately 152 million shekels from 115 million shekels last year. Castro's flagship brand saw moderate revenue growth from 144 million to 149 million shekels, while operating profit jumped from 10.4 million to 18.5 million shekels.

CEO Yair Ohayon expressed cautious optimism about the cosmetics sector, which includes Kiko Milano and Yves Rocher. He stated, "I have not given up on the cosmetics sector," noting the potential for growth but also the possibility of closing the segment if it does not meet expectations soon. He emphasized that current losses are relatively small and manageable.

Additionally, the group announced a new growth initiative: a joint venture with competitor Renuar to launch the Chinese sports brand ANTA in Israel, with an initial investment of about 30 million shekels. This venture, expected to start in 2027, will include stores, an online sales platform, and wholesale distribution. This collaboration reflects a broader industry trend where major fashion groups diversify their portfolios beyond single brands, focusing on international brands and lifestyle categories such as sportswear.