Victory published its second-quarter report. Yochananof filed the same day, and the comparison between the two is the most interesting thing in either set of accounts.
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The Quarter
| NIS millions | The quarter | Share of revenue |
|---|---|---|
| Revenue | 635.8 | |
| Gross profit | 157.3 | 24.7% |
| Operating profit | 23.9 | 3.8% |
| Pre-tax profit | 13.5 | 2.1% |
| Net profit | 10.5 | 1.6% |
| Basic earnings per share | NIS 0.74 | |
| Balance sheet total | 2,119.9 | |
| Shareholders' equity | 414.5 |
Two Food Retailers, the Same Day
| Q2 2026 | Victory | Yochananof |
|---|---|---|
| Revenue | 635.8m | 1,233.4m |
| Gross margin | 24.7% | 22.0% |
| Operating margin | 3.8% | 7.0% |
| Margin survival | 15% | 32% |
| Net margin | 1.6% | 4.1% |
| Leverage ratio | 5.1 | 2.7 |
And this is a table that inverts the intuition.
Victory starts with the higher gross margin - 24.7% against 22.0%. That is, on every shekel sold it keeps more after the cost of goods.
And it arrives at the operating line with almost half of Yochananof's.
The entire gap sits between those two lines - in the cost of running the chain relative to the sales it generates. Victory leaves 85% of its gross margin there; Yochananof 68%.
And that is the same conclusion that recurred this week in every sector we touched: the gross margin is a starting point. What decides is how much of it remains.
And what I cannot determine from the structured filing is why. Store size, turnover per square metre, rent and staff per shift - all of those set that ratio, and none of them is in the accounts.
And the Leverage: 5.1 to One
NIS 2,119.9 million of assets on equity of NIS 414.5 million.
And that is almost double Yochananof, which stands at 2.7.
And in food retail, the bulk of that difference is store leases - the same mechanism I described today at Holmes Place: a rental contract is recorded as an asset and as a liability, and the interest on it falls below the operating line.
And that also explains the 43.5% - the share taken from operating profit on the way to the pre-tax line. At Yochananof it is 24.9%.
That is, Victory pays twice for the same footprint: once in the operating cost above the line, and once in lease interest below it.
The Tax
NIS 13.5 million before tax and NIS 10.5 million after - tax of NIS 3.1 million, an effective rate of 22.8%.
Almost identical to Israel's corporate rate. A report clean of exceptional items on that line.
הזווית שלי
דעה אישית של אילן אברמוב - לא ייעוץ ולא המלצה
What I take from this pair is that the gross margin in food retail is almost meaningless on its own.
Victory charges a higher margin than Yochananof on every shekel of goods - which is normally considered an advantage. And at the bottom line it earns 1.6% of turnover against 4.1%.
And the explanation is neither in the buying nor in the selling. It is in the operating.
And what I think should be said carefully is that the gap may also come from things that are not a failure: a chain opening new stores carries their full cost before they reach maturity. In retail a store takes time to reach its target turnover, and its costs are full from day one. A single quarter does not distinguish between the two.
So the number I will follow is margin survival over time. If 15% becomes 20% and then 25% in the coming quarters, the gap was a matter of ramp-up. If it stays at 15%, it is structural.
And what I would look for in the full accounts is the store count and like-for-like sales. Without both, there is no way to tell a chain that is growing from a chain that is getting more expensive.
(It is important to stress: this is my personal opinion only, and nothing herein constitutes a recommendation to take any action.)
