Fox Group Reports Strong Q2 Growth Led by Fashion and Home Sectors Despite Retailors' Struggles

Fox Group, led by controlling shareholder Harel Wizel, reported a robust second quarter with revenues rising 12.8% to a record 1.8 billion shekels. Operating profit increased by about 30% to 223 million shekels, while net profit surged 75.5% to 123 million shekels. The group declared a dividend payout of 150 million shekels. The growth was driven primarily by the fashion and home fashion sectors and brand activities including Shilav, Saks, Flying Tiger, San Glass, and Jumbo. However, the Retailors division continued to face challenges, with declining Nike sales globally and ongoing difficulties in the Canadian market.

Fashion and home fashion revenues grew 15.3% to 570 million shekels, though same-store sales rose only 2.6%, including online sales. Terminal X e-commerce sales increased 20.5% to 161 million shekels, supported by acquisitions and organic growth. The "Others" segment, which expanded retail space, grew 37.6% to 434 million shekels, with same-store sales up 3.3%. In contrast, Lalin's revenues rose just 2.4% to 74.3 million shekels, mainly due to increased retail space, while same-store sales declined 9.8%. Retailors sales fell 1.3% to 594.4 million shekels, with same-store sales down 8.6%.

Wizel addressed the Canadian operations, noting the closure of eight Fox Home stores converted partly to Flying Tiger outlets. He said Mango Canada is balanced and slightly profitable, Lalin is losing but improving, and despite global Nike challenges, the Canadian Nike business is profitable. Flying Tiger's recent Canadian entry showed promising early results. Wizel emphasized cautious expansion of Nike stores due to global difficulties, preferring to wait two to three years for better opportunities.

Regarding Jumbo, which Fox holds the Canadian franchise for, Wizel acknowledged ongoing struggles in Israel and a strategic shift from large 10,000-square-meter stores to smaller 1,200-square-meter outlets for faster expansion. He said, "We know our mistakes with Jumbo and are fixing everything," highlighting supply chain improvements to reduce costs by shipping directly from China to Israel instead of via Greece. He projected profitability in two to three years.

Finally, Wizel explained the dividend decision as prudent amid political uncertainty, preferring to retain cash. He also announced the appointment of Oren Brent as the group’s first Chief Data Officer to lead data, analytics, and AI initiatives for operational efficiency. Brent previously co-founded and led Rise, an AI-based advertising platform.