Max Stock Limited Reports Second Quarter and First Half 2024 Financial Results

Rhea-AI Summary

Max Stock (TASE: MAXO) reported strong financial results for Q2 and H1 2024. Q2 revenue increased 25.4% to ILS 316.9 million, with comparable store sales up 14.5%. H1 revenue grew 18.3% to ILS 630.1 million, with comparable store sales up 8.9%. The company's position as Israel's premier extreme value retailer resonated with consumers, driving significant growth.

Key Q2 highlights include:
- Gross margin improved 50 basis points to 41.7%
- GAAP net income (attributable to shareholders) increased 55.4% to ILS 25.8 million
- Adjusted EBITDA rose 48.9% to ILS 44.8 million

The company expanded its selling space by approximately 13% over the past 12 months, adding almost 8,000 net square meters. Max Stock's strong performance was attributed to increased store traffic, improved procurement terms, and significant operating leverage.

Positive

• Q2 revenue increased 25.4% to ILS 316.9 million
• Q2 comparable store sales increased 14.5%
• H1 revenue grew 18.3% to ILS 630.1 million
• H1 comparable store sales increased 8.9%
• Q2 gross margin improved 50 basis points to 41.7%
• Q2 GAAP net income (attributable to shareholders) increased 55.4% to ILS 25.8 million
• Q2 Adjusted EBITDA rose 48.9% to ILS 44.8 million
• Selling space expanded by 13% over the past 12 months
• Improved procurement terms and significant operating leverage

Negative

• Cash and cash equivalents decreased from ILS 128.9 million at December 31, 2023 to ILS 94.6 million at June 30, 2024
• Inventories increased from ILS 144.6 million at December 31, 2023 to ILS 175.2 million at June 30, 2024

Second Quarter Revenue Increased 25.4% to ILS 316.9 million; Comparable Store Sales Increased 14.5%; GAAP Net Income (Attributable to Shareholders) Increased 55.4%

First Half Revenue Increased 18.3% to ILS 630.1 million; Comparable Store Sales Increased 8.9%; GAAP Net Income (Attributable to Shareholders) Increased 37.6%

CAESAREA, Israel, Aug. 14, 2024 /PRNewswire/ -- Max Stock Limited (TASE: MAXO) (the "Company") today reported financial results for the second quarter and six months ended June 30, 2024.

Second Quarter 2024 Summary

• Revenue increased 25.4% to ILS 316.9 million.
• Comparable store sales increased 14.5%.
• Gross margin increased 50 basis points to 41.7%.
• GAAP Net income (attributable to shareholders) increased 55.4% to ILS 25.8 million.
• Adjusted Net income¹ (attributable to shareholders) increased 62.2% to ILS 25.8 million.
• Adjusted EPS¹ (attributable to shareholders) increased 61.4% to ILS 0.18.
• Adjusted EBITDA² increased 48.9% to ILS 44.8 million.

First Half 2024 Summary

• Revenue increased 18.3% to ILS 630.1 million.
• Comparable store sales increased 8.9%.
• Gross margin increased 70 basis points to 42.0%.
• GAAP net income (attributable to shareholders) increased 37.6% to ILS 51.7 million.
• Adjusted Net income¹ (attributable to shareholders) increased 40.6% to ILS 51.8 million.
• Adjusted EPS¹ (attributable to shareholders) increased 40.0% to ILS 0.37.
• Adjusted EBITDA² increased 31.3%.

"We delivered a very strong first half with topline growth in the high teens, including a high single digit gain in comparable store sales, and adjusted EBITDA up 31.3% compared to the first half of 2023," said Ori Max, Chief Executive Officer. "The second quarter contributed significantly to our year-to-date performance fueled by a 14.5% increase in comparable store sales, as our position as Israel's premiere extreme value retailer continues to resonate with consumers in the current operating environment. In parallel, we added almost 8,000 net square meters, or approximately 13%, of selling space over the past 12 months as we continue to successfully execute our store expansion strategy. Our top line growth also drove improved procurement terms as well as significant operating leverage, which resulted in a 37.6% increase in GAAP net income (attributable to shareholders) in the first half of 2024."

Second Quarter Results (2024 compared with 2023)

Revenue increased 25.4% to ILS 316.9 million in the second quarter 2024 as compared with revenue of ILS 252.8 million in the second quarter 2023. The increase over the same period last year was largely attributable to the opening of new branches which added approximately 7,700 net square meters of selling space compared to the year-ago period, combined with a 14.5% increase in comparable store sales largely driven by increased store traffic and a shift in timing of the Passover holiday into the second quarter of 2024, compared to being included in the first quarter of 2023.

Gross profit increased 26.9% to ILS 132.1 million in the second quarter 2024 from ILS 104.0 million in the second quarter 2023. Gross margin was ~41.7% as compared to ~41.2% in the last year period. The 50-basis point improvement in gross margin over Q2 2023 was primarily attributable to trade efficiency gains that resulted in stronger buying power compared to the year-ago period. 

Selling, general and administrative expenses increased to ILS 88.0 million in the second quarter 2024 from ILS 73.3 million in the second quarter 2023, primarily driven by branch expansion which added incremental expenses related to marketing, salary and the addition of right of use assets. As a percentage of sales, selling, general and administrative expenses decreased approximately 120 basis points to 27.8% in the second quarter 2024, compared with 29.0% in the second quarter 2023, largely due to operating leverage.

GAAP net income (attributable to shareholders) increased 55.4% to ILS 25.8 million.

Adjusted net income attributable to shareholders increased 62.2% to ILS 25.8 million in the second quarter of 2024, as compared with adjusted net income attributable to shareholders of ILS 15.9 million in the second quarter of 2023.

Adjusted EPS attributable to shareholders increased 61.4% to ILS 0.18 per share, in the second quarter of 2024, as compared with adjusted EPS attributable to shareholders of ILS 0.11 per share, in the second quarter of 2023.

Adjusted EBITDA increased 48.9% to ILS 44.8 million in the second quarter of 2024 from ILS 30.1 million in the second quarter of 2023.

First Half 2024 Results

Revenue for the first half of 2024 increased 18.3% to ILS 630.1 million, compared with revenue of ILS 532.4 million in the first half of 2023. The increase in revenue was driven by an 8.9% gain in comparable store sales and the sales contribution from new branches. The increase in same stores sales was fueled by an increase in store traffic that also converted into higher revenue from seasonal items compared with the prior year period.

Gross profit increased 20.4% to ILS 264.6 million in the first half of 2024 from ILS 219.8 million a year ago. Gross margin was ~42.0% as compared to ~41.3% in the prior year period. The 70-basis point improvement in gross margin year-over-year was driven primarily by continued improvement in trade efficiency that resulted in stronger buying power relative to the year-ago period, along with a decrease in logistical expenses as a result of more efficient inventory management.

Selling, general and administrative expenses increased to ILS 177.7 million in the first half of 2024 from ILS 152.0 million in the first half of 2023. The increase in operating expenses was related to branch expansion which added incremental expenses related to marketing, salary and the addition of right of use assets. As a percentage of sales, selling, general and administrative expenses improved 40 basis-points and were 28.2% in the first half of 2024 compared with 28.6% in the first half of 2023.

GAAP net income (attributable to shareholders) increased 37.6% to ILS 51.7 million.

Adjusted net income (attributable to shareholders) increased 40.6% to ILS 51.8 million.

Adjusted EPS¹(attributable to shareholders) increased 40.0% to ILS 0.37 in the first half of 2024 as compared with adjusted EPS¹(attributable to shareholders) of ILS 0.27 per share, in the first half of 2023.

Adjusted EBITDA² increased 31.3% to ILS 87.8 million in the first half 2024 from ILS 66.9 million in 2023.

Balance Sheet and Cash Flow Highlights

The Company's cash and cash equivalents balance at June 30, 2024 was ILS 94.6 million compared with ILS 128.9 million at December 31, 2023 and ILS 65.2 million at June 30, 2023. The Company ended the second quarter of 2024 with total debt of ILS 19.4 million compared with total debt of ILS 33.0 million at December 31, 2023 and ILS 34.4 million at June 30, 2023.

Inventories at June 30, 2024 were ILS 175.2 million compared with ILS 144.6 million at December 31, 2023 and ILS 156.3 million at June 30, 2023.

Conference Call Information

The Company will host a conference call on August 14, 2024 at 8:00 a.m. Eastern Standard Time to discuss second quarter 2024 results (link). The conference call will also be accessible at https://ir.maxstock.co.il/en/event-en/.There will be a slide presentation that accompanies the call. The slides will be accessible at   https://ir.maxstock.co.il/en/presentation-en/. An archived webcast of the conference call will be available at https://ir.maxstock.co.il/en/presentation-en/.

Note: Totals may be slightly impacted by minor rounding differences.

¹ As used throughout this release, adjusted Net Income (attributable to shareholders) 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 As used throughout this release, adjusted EBITDA Pre IFRS 16 defined as Net Income + Income Tax Expenses + Net Interest Expenses + D&A + Other Expenses – the impact of IFRS 16 + Share-based payment.

About Max Stock

Max Stock is Israel's leading extreme value retailer, currently present in 64 locations throughout Israel and 2 locations in Portugal that opened in 2023. We offer a broad assortment of quality products for customers' everyday needs at affordable prices, helping customers "Dream Big, Pay Small". For more information, please visit https://ir.maxstock.co.il   

Forward-Looking Statements

It should be emphasized that this report includes forward-looking information as defined under the Securities Law, 5728-1968. Forward-looking information is uncertain information regarding the future, including forecasts, projections, estimates or other information which refer to a future event or matter, the eventuation of which is uncertain and/or not within the Company's control. The forward-looking information included in this report is based on the current information held by the Company or its current assessments, as of the publication date of this report.

Company Contacts:
Talia Sessler,
Chief Corporate Development and IR Officer
talia@maxstock.co.il

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SOURCE Max Stock Limited

FAQ

What was Max Stock's revenue growth in Q2 2024?

Max Stock's revenue increased 25.4% to ILS 316.9 million in Q2 2024 compared to Q2 2023.

How much did Max Stock's comparable store sales grow in Q2 2024?

Max Stock's comparable store sales increased by 14.5% in Q2 2024.

What was Max Stock's (MAXFF) GAAP net income growth in Q2 2024?

Max Stock's GAAP net income (attributable to shareholders) increased 55.4% to ILS 25.8 million in Q2 2024.

How much did Max Stock's Adjusted EBITDA grow in Q2 2024?

Max Stock's Adjusted EBITDA increased 48.9% to ILS 44.8 million in Q2 2024.

What was Max Stock's revenue growth for the first half of 2024?

Max Stock's revenue for the first half of 2024 increased 18.3% to ILS 630.1 million compared to the first half of 2023.