Strauss Group reported its second quarter results this morning, 12 August 2026.
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The Quarter
| NIS millions | The quarter | A year ago | Change |
|---|---|---|---|
| Sales | 1,843 | 1,875 | -1.7% |
| Cost of sales excluding commodity hedging | 1,162 | 1,274 | -8.8% |
| Commodity hedging adjustments | (45) | 18 | |
| Cost of sales | 1,117 | 1,292 | -13.5% |
| Gross profit | 726 | 583 | +24.4% |
| % of sales | 39.4% | 31.1% | |
| Selling and marketing expenses | 341 | 337 | +1.1% |
| General and administrative expenses | 142 | 129 | +10.6% |
| Share in associates' profits | 107 | 76 | +39.6% |
| Share in greenhouse companies' losses | (9) | (10) | |
| Operating profit | 366 | 188 | +94.6% |
| Financing expenses, net | (77) | (64) | +19.6% |
| Pre-tax profit | 289 | 124 | +133.2% |
| Income tax | (47) | (33) | +44.2% |
| Effective tax rate | 16.3% | 26.3% | |
| Profit for the period | 242 | 91 | +164.9% |
| Attributable to the company's shareholders | 213 | 64 | +231.2% |
| Attributable to non-controlling interests | 29 | 27 | +9.2% |
And for the first half: sales of NIS 3,829 million against NIS 3,762 million - up 1.8% - and profit attributable to shareholders of NIS 359 million against NIS 150 million, up 139.4%.
The Line That Explains Everything Else
The gross margin rose from 31.1% to 39.4%.
Eight and three tenths percentage points, in a single quarter.
And the mechanics are almost brutally simple: sales fell 1.7%. Cost of sales, before hedging effects, fell 8.8%. When cost falls five times faster than revenue, the margin opens on its own.
And that is before accounting for the fact that hedging worked against the company. The commodity hedging adjustment line swung from plus NIS 18 million a year ago to minus NIS 45 million in the quarter - a NIS 63 million deterioration.
Meaning: the fall in raw material costs was larger still than the reported line suggests, and hedging absorbed part of it.
And from there on, every line in the report is derived from that one. Selling expenses rose just 1.1% and G&A 10.6% - meaning the expense base barely moved. When gross profit adds NIS 143 million and expenses add NIS 17 million, the difference drops straight into operating profit.
And Two More Lines That Enlarged the Jump
The first - the associates. The share in profits of companies accounted for under the equity method rose 39.6%, to NIS 107 million.
And here something interesting emerges: under the proportionate consolidation method - which presents Strauss's share of its associates in the top line rather than in a single line - group sales actually fell:
| NIS millions, proportionate | The quarter | A year ago | Change |
|---|---|---|---|
| Sales | 2,867 | 3,073 | -6.7% |
| Gross profit | 1,029 | 851 | |
| % of sales | 35.9% | 27.7% |
Meaning the associates sold less and earned more - exactly like the company itself. The same phenomenon, in both halves of the group.
And the second - tax. The effective tax rate fell from 26.3% to 16.3%. Pre-tax profit rose 133.2%, and after-tax profit rose 164.9% - the gap between the two is entirely the tax rate.
The Cleaner Number
A headline of plus 231% in profit to shareholders is a distorted number, and Strauss itself supplies the alternative.
The company also publishes a managed profit, which strips out accounting hedge adjustments, share-based payment, other income and expenses, and the greenhouse companies:
| NIS millions, managed | The quarter | A year ago | Change |
|---|---|---|---|
| Operating profit | 363 | 255 | +41.9% |
| Profit for the period | 224 | 117 | +90.3% |
| Attributable to shareholders | 195 | 90 | +113.3% |
Plus 113.3% instead of plus 231.2%.
Still a doubling, and still a very strong quarter - but half the reported headline. The difference between the two figures is accounting noise, not business.
What Is Not in the Report
The report presents the result, not the cause. The summary tables show that cost of sales fell 8.8%, but they do not break down what within it fell - raw materials, energy, freight or mix.
And that question has practical significance, because it determines whether 39.4% is a new margin or a moment.
One further detail worth noting: from the first quarter of 2026, group management determined that the greenhouse activity (TheKitchenHub) is no longer a business component it reviews on an ongoing basis, and it is therefore excluded from the managed reporting.
הזווית שלי
דעה אישית של אילן אברמוב - לא ייעוץ ולא המלצה
This is an excellent report, and it still demands careful reading - because its headline is not the line that matters.
The headline says profit to shareholders rose 231%. The number is correct, and it is also misleading - because it is measured against a low base of NIS 64 million, benefits from a tax rate cut almost in half, and contains accounting hedge swings.
The number I look at is the gross margin: 39.4% against 31.1%.
And why that one: because it cannot be distorted. There is no tax in it, no financing, no low comparison base. It says one thing - on every shekel of sales, Strauss now keeps eight agorot more than it kept a year ago.
And what troubles me is that sales fell.
Minus 1.7% in the accounting statements, and minus 6.7% on the proportionate basis - which is, in my view, the more accurate economic picture, because it includes the group's share of all its activities. A food company selling less and earning far more is benefiting from cheaper inputs, not from demand.
And that distinction is the whole point. A margin that opens because the company sold more, or sold a more expensive mix, is a business achievement. A margin that opens because raw materials got cheaper is a gift from the market - and the market takes it back. And in this report sales are falling, which points clearly to the second possibility.
And what genuinely impresses me is the expense discipline. Selling and marketing expenses rose just 1.1%. A food company enjoying a cost tailwind usually spends it on marketing effort - and here it did not. The entire improvement stayed in profit.
And that is a double-edged sword. In the short term it produces exactly the quarter we just saw. In the long term, a food company that does not invest in its brand while it has the money to do so may find it bought a quarter and sold market share. The answer to that will be visible in the sales line of coming quarters, not in the profit line of this one.
