Third Quarter Revenue Increased 18.6% to ILS 373.1 million; Comparable Store Sales Increased 9.2%; GAAP Net Income (Attributable to Shareholders) Increased 35.3%
First Nine Month Revenue Increased 18.4% to ILS 1.0 billion; Comparable Store Sales Increased 9.0%; GAAP Net Income (Attributable to Shareholders) Increased 37.0%
CAESAREA, Israel, Nov. 20, 2024 /PRNewswire/ -- Max Stock Limited (TASE: MAXO) (the "Company") today reported financial results for the third quarter and nine months ended September 30, 2024.
Third Quarter 2024 Summary
Revenue increased 18.6% to ILS 373.1 million.
Comparable store sales increased 9.2%.
Gross margin was 41.3%.
GAAP Net income (attributable to shareholders) increased 35.3% to ILS 31.3 million.
Adjusted Net income1 (attributable to shareholders) increased 34.8% to ILS 31.3 million.
Adjusted EPS1 (attributable to shareholders) increased 34.7% to ILS 0.22.
Adjusted EBITDA2 increased 25.0% to ILS 56.5 million.
First Nine Months 2024 Summary
Revenue increased 18.4% to ILS 1.0 billion.
Comparable store sales increased 9.0%.
Gross margin was 41.7%.
GAAP net income (attributable to shareholders) increased 37.0% to ILS 83.0 million.
Adjusted Net income1 (attributable to shareholders) increased 38.4% to ILS 83.2 million.
Adjusted EPS1 (attributable to shareholders) increased 37.5% to ILS 0.59.
Adjusted EBITDA2 increased 28.7% to ILS 144.3.
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.
"We were pleased to carry our first half momentum into the third quarter, delivering high-teens revenue growth fueled by a high single-digit increase in comparable store sales and successful new store openings over the past 12-months," said Ori Max, Chief Executive Officer. "This topline performance generated meaningful expense leverage, driving a 25% increase in adjusted EBITDA and a 35% increase in adjusted Net Income. The work we've done to simultaneously accelerate sales growth and enhance profitability is underscored by adjusted earnings per share of ILS 0.59 for the first nine months 2024, which eclipsed the ILS 0.58 we reported for the full year 2023. Looking ahead, we remain well-positioned to capitalize on the ongoing consumer shift toward our value-oriented offerings which is adding to our optimism about the growth opportunities that lie ahead for Max Stock."
Third Quarter Results (2024 compared with 2023)
Revenue increased 18.6% to ILS 373.1 million in the third quarter 2024 as compared with revenue of ILS 314.5 million in the third quarter 2023. The increase over the same period last year was largely attributable to the opening of new branches which added approximately 6,000 net square meters of selling space compared to the year-ago period, combined with a 9.2% increase in comparable store sales largely driven by an increase in store traffic and higher conversion driven by demand for seasonal items, partially offset by a shift in timing of the Jewish New Year holiday into the fourth quarter of 2024, compared to being included in the third quarter of 2023.
Comparable store sales for July – October 2024, which neutralizes the timing of the holidays, was 10.9%. However, October 2023 was impacted by the onset of the Iron Swords war, with negative comparable store sales of ~16%, due to temporary closure of our stores and reduced time schedule throughout the month of October 2023.
Gross profit increased 16.9% to ILS 154.1 million in the third quarter 2024 from ILS 131.8 million in the third quarter 2023. Gross margin was ~41.3% as compared to ~41.9% in the last year period. The 60-basis point decline in gross margin over Q3 2023 was primarily attributable to temporarily higher costs associated with the Company's distribution facility consolidation.
Selling, general and administrative expenses increased to ILS 99.3 million in the third quarter 2024 from ILS 87.7 million in the third 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 26.6% in the third quarter 2024, compared with 27.8% in the third quarter 2023, largely due to operating leverage.
GAAP net income (attributable to shareholders) increased 35.3% to ILS 31.3 million.
Adjusted net income attributable to shareholders increased 34.8% to ILS 31.3 million in the third quarter of 2024, as compared with adjusted net income attributable to shareholders of ILS 23.2 million in the third quarter of 2023.
Adjusted EPS attributable to shareholders increased 34.7% to ILS 0.22 per share, in the third quarter of 2024, as compared with adjusted EPS attributable to shareholders of ILS 0.17 per share, in the third quarter of 2023.
Adjusted EBITDA increased 25.0% to ILS 56.5 million in the third quarter of 2024 from ILS 45.2 million in the third quarter of 2023.
First Nine Months 2024 Results
Revenue for the first nine months of 2024 increased 18.4% to ILS 1.0 billion, compared with revenue of ILS 846.9 million in the first nine months of 2023. The increase in revenue was driven by a 9.0% 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 and higher conversion driven by demand for seasonal items, partially offset by a shift in timing of the Jewish New Year holiday into the fourth quarter of 2024, compared to being included in the third quarter of 2023.
Gross profit increased 19.1% to ILS 418.7 million in the first nine months of 2024 from ILS 351.7 million a year ago. Gross margin was ~41.7% as compared to ~41.5% in the prior year period.
Selling, general and administrative expenses increased to ILS 277.0 million in the first nine months of 2024 from ILS 239.7 million in the first nine months 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 80 basis-points to 27.6% in the first nine months of 2024 compared with 28.4% in the first nine months of 2023.
GAAP net income (attributable to shareholders) increased 37.0% to ILS 83.0 million.
Adjusted net income (attributable to shareholders) increased 38.4% to ILS 83.2 million.
Adjusted EPS1(attributable to shareholders) increased 37.5% to ILS 0.59 in the first nine months of 2024 as compared with adjusted EPS1(attributable to shareholders) of ILS 0.43 per share, in the first nine months of 2023.
Adjusted EBITDA2 increased 28.7% to ILS 144.3 million in the first nine months of 2024 from ILS 112.1 million in 2023.
Balance Sheet and Cash Flow Highlights
The Company's cash and cash equivalents balance at September 30, 2024 was ILS 87.2 million compared with ILS 128.9 million at December 31, 2023 and ILS 119.9 million at September 30, 2023. The Company ended the third quarter of 2024 with total debt of ILS 14.6 million compared with total debt of ILS 33.0 million at December 31, 2023 and ILS 31.1 million at September 30, 2023.
Inventories at September 30, 2024 were ILS 221.4 million compared with ILS 144.6 million at December 31, 2023 and ILS 148.6 million at September 30, 2023. The increase in inventories is primarily attributable to the building up of inventories for the opening of new branches.
Max Stock is Israel's leading extreme value retailer, currently present in 64 locations throughout Israel and 2 locations in Portugal. 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
