Golf Group Profit Jump: Significant Profitability Improvement Driven by Weak Dollar
The Golf Group concluded the second quarter of 2026 with a moderate sales increase, while net profit nearly tripled. The primary driver was a sharp reduction in financing expenses following the weakening of the US dollar.
The Golf Group reported its results for the second quarter of 2026, showing a moderate increase in sales and a significant improvement in profitability. Net profit nearly tripled, primarily due to a sharp reduction in financing expenses following the weakening of the US dollar.
Quarterly sales for Golf rose by 3.1%, totaling 229 million shekels. The company benefited from the opening of 26 new stores and a low-base effect from the previous year, when second-quarter sales were impacted by the onset of the "Iron Swords" operation. Conversely, growth was partially offset by the timing of the Passover holiday; this year, pre-holiday sales occurred in March and were recorded in the first quarter, whereas last year they fell within the second quarter.
In the retail industry, revenue per square meter in identical stores is the key metric for organic growth, as it neutralizes the impact of store openings or closures. For the Golf Group, this metric decreased by 1.3% to 1,268 shekels. Performance varied significantly by sector:
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The home fashion sector (Golf & Co, Golf Kids, Kitan, Sabon) saw a 9.2% decline in revenue per square meter in identical stores to 1,100 shekels.
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The apparel fashion sector (Golf, Intima, Polgat) recorded an 8% increase in revenue per square meter in identical stores to 1,382 shekels.
Sales in the apparel sector rose by 10% to 111 million shekels, with operating profit doubling to 19.3 million shekels compared to 9.5 million shekels in the same quarter last year. In contrast, sales in the home fashion sector fell by 2.3% to 118 million shekels, and the sector's operating profit dropped by 51.4% to 6.5 million shekels.
Despite mixed results in identical stores, the group's gross profit grew by 6.3% to 148.5 million shekels. The gross profit margin rose to 65%, up from 62.9% in the corresponding quarter. This indicates that the company, which purchases most of its inventory from China in dollars, did not pass on the full savings from the exchange rate decline to customers through price cuts.
Operating profit increased by 3 million shekels to 26 million shekels, partly aided by a 2-million-shekel reduction in advertising expenses. The operating profit margin reached 11.3%, compared to 10.3% in the second quarter of last year.
Golf finished the quarter with a net profit of 15.6 million shekels, an increase of 10 million shekels (a 179% jump) compared to the same period last year. The primary improvement stemmed from financing expenses, which were cut nearly in half to 8.8 million shekels from 16.9 million shekels. The company attributed this to lower foreign currency hedging costs. Following these results, Golf announced a dividend distribution of 15 million shekels.
