Shufersal Ends 2023 with Impressive Profit Surge: net profit skyrocketed to NIS 312 million

Shufersal, Israel's leading retail chain, concluded 2023 on a high note, reporting a significant surge in both sales and net profit. The company's net profit skyrocketed to NIS 312 million, marking a remarkable increase from NIS 2 million in the previous year. This outstanding performance was attributed to strategic price adjustments and the successful implementation of an efficiency plan.

The company's sales witnessed a notable rise, reaching NIS 15.2 billion, representing a growth of 3.5%. Despite facing challenges such as the impending departure of Chairman Itzik Abarkhan and CEO Uri Waterman, Shufersal managed to maintain its competitive edge in the market.

The recent acquisition of a 24.9% controlling stake by the Amir brothers, Yossi and Shlomi, also played a pivotal role in Shufersal's growth trajectory. As part of the dividend distribution, the Amir brothers are set to receive approximately NIS 45 million, further solidifying their stake in the company.

However, it's noteworthy that Shufersal experienced a slight decline in sales per square meter, attributed to the expansion of online operations and the establishment of automatic collection centers. Despite this, the company's online sales remained robust, comprising 17.5% of total sales in 2023.

The retail sector, including Shufersal branches and online operations, saw a growth of 3.6%, although sales in existing stores grew at a comparatively lower rate of 2.4%. This was despite a 6.2% increase in food prices throughout the year.

The fourth quarter saw a surge in food retail sales, driven by increased demand during the war period. Shufersal recorded a 7.5% growth in food retail sales, accompanied by improvements in gross and operating profitability.

Additionally, Shufersal's efficiency plan, which involved workforce optimization and store closures, proved to be instrumental in reducing expense ratios and boosting operating profit by 150%. The pharma arm also experienced a remarkable increase in operating profit, reflecting the overall success of the company's strategic initiatives.

Moreover, an additional income of NIS 57 million was attributed to a change in estimate regarding the valuation of non-financial assets and real estate, further contributing to Shufersal's improved bottom line.

In summary, Shufersal's robust performance in 2023 underscores its resilience and adaptability in the face of market challenges, positioning the company for sustained growth under the leadership of the Amir brothers.