Castro in a strong comeback: Profits soared after a year of declines
The Israeli fashion company reports a strong quarter with record operating profit and revenue growth. After 2025 ended with a profit decline of over 52% and the first quarter of the year closed with a loss of 28 million shekels, Castro signals a full recovery: "We continue to work to maximize sales and profitability in all brands."
Castro is staging a strong comeback. The unusually hot weather during the last winter, which the company cited as the cause of its dramatic profit decline, has apparently benefited fashion and clothing sales this time around.
Castro is publishing its second-quarter reports following an impressive move: the Castro-Hoodies group and Renuar will jointly establish the operations of the Chinese sports giant ANTA in Israel. The venture will include wholesale distribution, the creation of a retail chain, and an online sales site, with an initial investment estimated at approximately 30 million shekels. Operations are expected to begin during 2027.
After a challenging 2025 that included a sharp decline in profits, and a difficult first quarter that closed with a loss of 28 million shekels, Castro is emerging from the crisis in the second quarter of 2026. Revenues increased by approximately 15.1% to roughly 580.5 million shekels, and the company achieved a quarterly record in operating profit of approximately 101 million shekels—a jump of about 68% compared to the same quarter last year.
Net profit in the second quarter surged by approximately 92% to roughly 44.6 million shekels, compared to 23.2 million shekels in the corresponding quarter of last year.
Furthermore, there is a consistent improvement in the Castro brand, which saw an operating profit increase of approximately 78% to roughly 18.5 million shekels (12.4% of turnover), compared to 10.4 million shekels (7.2% of turnover) in the same quarter last year.
During the second quarter, the group recorded high double-digit operating profitability rates across all its clothing and fashion accessory brands. Net cash flow from current operations grew by approximately 180% to 134.7 million shekels, compared to 48.1 million shekels in the corresponding quarter last year.
Yair Ohayon, CEO of the Castro-Hoodies group, stated:
"We are concluding the second quarter with a record operating profit that crossed the 100 million shekel threshold. These strong results are due to high demand, increased sales, and a change in the sales mix, alongside the positive contribution of the shekel-dollar exchange rate."
He added: "We continue to develop and invest in our brands according to our strategic plan, focusing on the uniqueness of each. At Castro, we are renovating existing stores with current, precise collections, emphasizing quality and trend adaptation. During the second quarter, Top Ten and Carolina Lemke stores were opened, as well as a new Hoodies location. The move to a unified logistics center in Moshav Hefetz Haim is streamlining storage and distribution, and we expect continued cost reductions.
This week, we announced a partnership with Renuar to lead the ANTA brand activity in Israel. The extensive experience of both groups, combined with ANTA's global success, gives us great confidence in our ability to successfully introduce the brand to the Israeli market."
Ohayon concluded: "The group maintains high liquidity, with cash and cash equivalents as of June 30, 2026, amounting to approximately 433.6 million shekels, and an excess of cash over financial debt of approximately 361 million shekels. Castro-Hoodies has a sound strategic plan for continued growth, and we remain committed to maximizing sales and profitability across all brands."
