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Max Stock Reports Strong Third Quarter Growth Driven by New Store Openings
Revenues Up 18.6% to ILS 373.1 Million; Comparable Store Sales Rise 9.2%; GAAP Net Income Increases 35.3%
Revenue for First Nine Months Hits ILS 1.0 Billion; Comparable Store Sales Up 9.0%; GAAP Net Income Jumps 37.0%
CAESAREA, Israel, Nov. 20, 2024 /PRNewswire/ — Max Stock Limited MAXO (the “Company”) today announced its financial results for the third quarter and the nine months ended September 30, 2024.
2024 Third Quarter Highlights
- Revenue rose 18.6% to ILS 373.1 million.
- Comparable store sales increased by 9.2%.
- Gross margin stood at 41.3%.
- GAAP net income (attributable to shareholders) climbed 35.3% to ILS 31.3 million.
- Adjusted net income1 rose 34.8% to ILS 31.3 million.
- Adjusted EPS1 grew 34.7% to ILS 0.22.
- Adjusted EBITDA2 increased 25.0% to ILS 56.5 million.
Results from the First Nine Months of 2024
- Revenue increased by 18.4% to ILS 1.0 billion.
- Comparable store sales increased 9.0%.
- Gross margin was 41.7%.
- GAAP net income climbed 37.0% to ILS 83.0 million.
- Adjusted net income1 rose 38.4% to ILS 83.2 million.
- Adjusted EPS1 grew 37.5% to ILS 0.59.
- Adjusted EBITDA2 increased 28.7% to ILS 144.3 million.
Note: Totals may be slightly impacted by minor rounding differences.
1 Adjusted net income (attributable to shareholders) is defined as net income + share-based payment, multiplied by the portion attributable to shareholders. Adjusted EPS (attributable to shareholders) is then divided by the number of basic shares.
2 Adjusted EBITDA Pre IFRS 16 is defined as net income + income tax expenses + net interest expenses + D&A + other expenses – the impact of IFRS 16 + share-based payment.
“We are pleased to maintain the momentum from our first half into the third quarter,” said Ori Max, Chief Executive Officer. “Our strong revenue growth of nearly 19% is supported by high single-digit growth in comparable store sales and our successful new store openings this year. This has enabled us to leverage expenses effectively, leading to a 25% increase in adjusted EBITDA and a 35% rise in adjusted net income. Our adjusted EPS of ILS 0.59 for the first nine months of 2024 already surpasses the ILS 0.58 we achieved for the entire year of 2023. Moving forward, we are well-positioned to benefit from the ongoing consumer trend towards value-oriented products, which enhances our outlook for future growth for Max Stock.
Third Quarter Overview (2024 vs. 2023)
During the third quarter of 2024, revenue reached ILS 373.1 million, up 18.6% compared to ILS 314.5 million in the previous year. This increase was primarily due to new store openings, which provided around 6,000 additional net square meters of selling space, along with a 9.2% rise in comparable store sales. Increased store traffic and a strong demand for seasonal items significantly contributed to this growth. However, a shift in timing for the Jewish New Year holiday into the fourth quarter of 2024 partially offset these gains, as it had fallen within the third quarter of 2023.
For the period from July to October 2024, comparable store sales, which account for the holiday timing adjustment, were 10.9%. In contrast, October 2023 was marked by a downturn due to the Iron Swords war, resulting in negative comparable store sales of approximately 16% amid temporary store closures and reduced hours.
Gross profit for the third quarter of 2024 increased by 16.9% to ILS 154.1 million from ILS 131.8 million the year before, though gross margin dipped slightly to about 41.3% from approximately 41.9%. This decline was primarily due to higher temporary costs related to consolidating the Company’s distribution operations.
Selling, general, and administrative expenses rose to ILS 99.3 million in the third quarter of 2024, increasing from ILS 87.7 million in the same period in 2023. This rise was mainly due to branch expansions, which incurred additional marketing, salary, and right of use asset costs. Nevertheless, as a percentage of sales, these expenses decreased roughly 120 basis points to 26.6% in the third quarter of 2024, compared to 27.8% the previous year, largely owing to the company’s operating leverage.
GAAP net income (attributable to shareholders) for the third quarter rose by 35.3%, reaching ILS 31.3 million.
Adjusted net income attributable to shareholders for the third quarter of 2024 also grew, increasing 34.8% to ILS 31.3 million compared to adjusted net income attributable to shareholders of ILS 23.2 million in the previous year.
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Max Stock Limited Sees Strong Growth in Q3 2024 Financial Results
Notable Increase in Earnings per Share
Adjusted EPS attributable to shareholders rose 34.7%, reaching ILS 0.22 in the third quarter of 2024 compared to ILS 0.17 in the same period of 2023.
Significant Growth in Adjusted EBITDA
Adjusted EBITDA surged by 25.0%, increasing to ILS 56.5 million in Q3 2024 from ILS 45.2 million a year earlier.
First Nine Months of 2024 Results
Revenue for the first three quarters of 2024 climbed 18.4% to ILS 1.0 billion, up from ILS 846.9 million during the same period in 2023. This rise in revenue was supported by a 9.0% increase in comparable store sales and contributions from newly opened branches. The boost in store sales stemmed from higher customer traffic and increased demand for seasonal products. However, this was partly countered by the timing of the Jewish New Year holiday, which shifted to Q4 of 2024.
The gross profit increased by 19.1%, amounting to ILS 418.7 million in the first nine months of 2024, up from ILS 351.7 million from the same time in 2023. Gross margin slightly improved to approximately 41.7% compared to around 41.5% in the previous year.
Selling, general, and administrative expenses rose to ILS 277.0 million from ILS 239.7 million during the same period in 2023. The growth in these expenses relates primarily to the costs associated with expanding branch operations, including increased marketing, salaries, and additional lease-related expenses. As a percentage of sales, these expenses improved by 80 basis points to 27.6% compared to 28.4% in the prior year.
GAAP net income attributable to shareholders increased by 37.0% to ILS 83.0 million. Similarly, adjusted net income also rose, climbing 38.4% to ILS 83.2 million. Adjusted EPS attributable to shareholders increased by a similar margin, reaching ILS 0.59 in the first nine months of 2024, compared to ILS 0.43 in the same period a year earlier.
Adjusted EBITDA grew by 28.7%, reaching ILS 144.3 million from ILS 112.1 million in 2023.
Balance Sheet and Cash Flow Highlights
As of September 30, 2024, the company’s cash and cash equivalents totaled ILS 87.2 million, down from ILS 128.9 million on December 31, 2023, and ILS 119.9 million the previous year. At the end of Q3 2024, total debt stood at ILS 14.6 million, a decrease from ILS 33.0 million at the end of 2023 and ILS 31.1 million a year earlier.
Inventories on September 30, 2024, were ILS 221.4 million, higher than ILS 144.6 million at the end of 2023 and ILS 148.6 million in September 2023. The increase in inventory primarily resulted from preparations for opening new branches.
Conference Call Information
The company will hold a conference call on November 20, 2024, at 8:00 AM Eastern Standard Time to discuss its Q3 2024 results. More information can be found on their investor relations page at https://ir.maxstock.co.il/en/event-en/. A slide presentation will accompany the call and will be accessible here. An archived version of the conference call will also be available.
About Max Stock
Max Stock is Israel’s leading extreme value retailer, offering a wide range of quality products at affordable prices. Currently, they operate 64 locations across Israel and two in Portugal, allowing customers to “Dream Big, Pay Small.” Further information can be found at https://ir.maxstock.co.il.
Forward-Looking Statements
This report contains forward-looking information, as defined under the Securities Law, 5728-1968. Such information involves uncertainties related to future events or matters, which may not be solely within the company’s control. The forward-looking statements are based on current assessments as of the report’s publication date.
Company Contacts:
Talia Sessler,
Chief Corporate Development and IR Officer
talia@maxstock.co.il
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SOURCE Max Stock Limited
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